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Part VI. Infrastructure Building to Ensure Taxpayer Trust

    In working on the reform of the entire tax systems, it is essential to gain trust of taxpayers in the tax system and tax administration in order to institute a desirable tax system. To this end, tax administration needs to arrange the environment so that taxpayers can carry out self-assessment and tax payment with no difficulty and to consolidate the tax administration system for fair and appropriate taxation. Therefore, to materialize these standpoints, following systems and measures need to be advanced:
1) Taxpayer Identification Numbers (TINs)
    Globalization, informatization, and computerization have been prevailing in worldwide economic transactions in recent years. Under this situation, the environments around the taxpayer identification number system are drastically changing. A growing number of Japanese people have also begun to think that the introduction of the system would be inevitable.
    In the past, a variety of discussions have been made on the taxpayer identification number system, including the significance of the system, concrete application of the system and privacy protection. Thus, it is urgent to start examination and formulate a concrete scheme for introduction.
2) Withholding and Year-End Adjustment of Income Tax
    Income tax is based on taxpayers' self-assessment, and their voluntary filing of returns and payment. And tax withholding and year-end adjustment are carried out on payments of tax on employment income. Since tax amount, including exemptions/deductions as special taxation measures, is adjusted at the end of the year, ordinary employment income earners need no filing an income tax return.
    Tax withholding and year-end adjustment should basically be maintained in the future in order to ensure appropriate and reliable taxation and provide the simplified and to provide taxpayers with convenient tax payment system. However, it is also important for employment income earners to file an income tax return by themselves because this will enhance the awareness of bearing common social costs. Thus, examination should be continued on promoting environments for simplified filing system (including electric filing of returns), while paying sufficient consideration to tax administration.
3) Publication of High-Paying Taxpayers
    The present public notification system exists in income tax, corporation tax and inheritance tax. It has been playing the role of checking taxpayers with the public since 1950 when introduced for the first time. The public notification system of income tax was modified into the tax amount notification system in 1983 partly for the purpose of honoring high-income taxpayers. The system has been occasionally utilized for a purpose other than the original purposes, posing a concern about possible disturbance of privacy. Meanwhile, it is undesirable that the modification of the system leads to lowered reliability of the self-assessment and payment system. Thus, discussions should be made on the existing public notification system, including introduction of an alternative system, by paying attention to the significance that high-income taxpayers should be honored by society.
4) Others