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Japan tax agency steps up monitoring of rich

Japan tax agency steps up monitoring of rich

TOKYO:  Authorities were prompted to take action out of concern that more and more citizens would believe the taxation system is unfair if it fails to properly tax the wealthy, who are typically more adept at tax planning.

“Tax authorities pointed out overseas bank accounts my client and I weren’t aware of,” a tax accountant said when recalling an inspection last autumn on the president of an information technology company who lives in Minato Ward, Tokyo. “That made me realize how serious they were.”

The president was eventually deemed to have failed to declare revenue of several million yen, and agreed to file revised tax returns.

In July 2014, the National Tax Agency set up teams targeting the rich at its three regional bureaus in Tokyo, Osaka and Nagoya.

Wealthy people have a substantial amount of assets in Japan and abroad, and often consult with accountants and other experts to take complicated steps to reduce their tax payments.

One of the project teams is based on the eighth floor of the Tokyo Regional Taxation Bureau in Tsukiji, Tokyo.

Experienced officials in their 30s and 40s, who also have extensive knowledge about international tax affairs, are gathering information on the wealthy.

They treat these taxpayers, their family members and related companies as a group and analyze their assets and investment activities.

According to estimates by Nomura Research Institute Ltd., there are nearly 1.22 million households in Japan with financial assets of ¥100 million, accounting for 2.3 percent of the total.

Among those, about 73,000 households, or 0.13 percent of all households, belong to a super-rich class, with financial assets of at least ¥500 million.