Japan Post likely to pay 533 bil. yen in taxes when privatized
Japan Post would need to pay a total of 533 billion yen a year in national and local taxes when it is privatized, according to the postal service entity’s estimate obtained by Kyodo News on Monday.
The total includes 211.9 billion yen in corporate income tax, 112.2 billion yen in enterprise tax and 59.1 billion yen in fixed asset tax.
Japan Post was created in April 2003 to take over three postal services — mail delivery, postal savings and life insurance — from the government’s Postal Services Agency. The Council on Economic and Fiscal Policy, a key government economic advisory panel, is calling for Japan Post to be privatized in five to 10 years from 2007.
As a public entity, Japan Post is not required to pay taxes at present.
The council compiled an interim report on privatization of the postal services in late April, saying Japan Post should pay taxes when it is privatized.
Japan Post made the estimate of its tax burden based on the outlook for profit in its medium-term business plan for fiscal 2003 to 2006.
The projected tax payment is expected to contribute to the government’s fiscal reform efforts as it is much larger than additional annual tax revenues of 200 billion yen expected to come from last year’s tobacco tax increase.
Japan Post also estimates it may need to pay 200 billion yen in premiums to the state-backed Deposit Insurance Corp. when it becomes a private entity.
