General Edition Sunday, June 25, 2006 Issue No. 380
+++ INDEX
- What's new
- Services lineup
- News
- Candidate roundup
- Upcoming events
- News credits
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| +++ WHAT'S NEW |
According to the Nikkei recently, more than 52,000 trusts
were set up by wealthy individuals, in order to stop
in-fighting between family members after they are gone.
This is almost double the number set up 10 years ago, and
clearly indicates that people both have assets they want to
pass on, and also that family members don't want to lose
their share and are willing to take legal action over it.
Traditionally, the family estate used to go to the wife,
then the eldest son. But with inheritance tax laws changing
back in the 1950's, it became more tax efficient for
families to distribute the inheritance among all the
siblings. While this tax rule had an altruistic objective,
that of sharing wealth, it instead raised the passions of
younger siblings who feared they might miss out. And now
that the economy is doing well again, those family members
are taking a keener interest. The Ministry of Justice says
that in 2004, there were more than 100,000 inheritance tax
cases that actually made it to court and by the Ministry's
own estimation, another 400,000 or more disputes that
didn't go all the way.
Inheritance tax is an interesting area, and in the latest
issue (Summer 2006) of Japan Inc. magazine, we discuss the
subject in some detail. You may be interested to know that
one of the largest (actually the 6th largest on record)
recent taxable inheritances was that of Den Fujita, who
passed away in 2004. He left his wife and two sons an
estate worth JPY49.1bn (US$420m) and had to pay JPY12.2bn
(US$106m) in tax. That's a lot, and is typical of how hard
the rich get penalized in Japanfor dying.
Is inheritance tax fair? We certainly don't think so.
Firstly, why, when a person has already paid income tax
and/or some other profits tax, should they have to pay it
again when they die? Secondly, the inheritance tax scales
are loaded so that only the rich actually pay any tax. If
you die with assets of JPY80m~JPY100m, depending on the
number of kids you have, you may not have to pay anything.
Of course some would say that this a good thing -- we
suppose it depends on whether you think a rich person
deserves to keep their earnings or not.
Thirdly, because the heirs of only about 115,000 deceased in
2003 actually had to pay inheritance tax, the amount of tax
contribution to the national tax coffers in that year
amounted to less than 2.5% of the overall take. Further,
since the tax is only levied on Japanese holding Japanese
assets, those people rich enough to be targeted have not
coincidentally been moving off-shore and spending their
money elsewhere. So the actual value of inheritance tax as
a fund raiser is questionable.
Instead, if Japan really wanted to be fair to all levels of
society, then the government should drop targeted taxes
like inheritance tax entirely and instead apply a broader,
fairer tax which hits the entire population... Oh, wait,
that's the consumption tax isn't it?
The fact is that the government has been quietly dropping
the rate of inheritance tax. Back in 2003 it dropped from
an infamous 70%, one of the world's highest rates, down to
50%. While that still seems high, in fact with all the
various deductions you can claim, the actual rate is more
like 30%. Compare this to the USA, where the effective rate
is about 40%, due to the fact that they offer very few
deductions. Yes, you read that right --
Japan's effective inheritance tax rate is lower than in the USA.
But the government is unlikely to drop inheritance tax
altogether. It has proved too useful as a tool to dislodge
financial assets from the aged and pass them on to their
off-spring, who are more likely to spend their windfall in
the economy. In fact, when the government dropped the gift
tax rate back in 2003 to allow those over 65 to make a
one-time gift of JPY25m (US$217,000) per child, the
resultant deluge of cash pumped JPY1trn (US$86.9bn) into
the economy in that year alone.
Our guru for the inheritance tax article was Takashi Hongo
of TACT Consulting (www.tactnet.com), probably on of the
best known inheritance lawyers in Tokyo. In our research wediscovered that
there are about 9m millionaires in the USA
and we were interested to know how many there were in Japan.
He couldn't give us an exact number, but said he thought that
we could reasonably apply the Pareto
Principle, otherwise known as the 80/20 rule, and thus it
is likely that about 20% of Japan's households, or about
10m families, hold assets of JPY100m (US$86,900) or more.
Most, of course, still in real estate --
although the number of shares is starting to rise.
If you want to know more about Japan's inheritance tax
status, you know where to go -- www.japaninc.com. Happy reading.
...The Information Janitors/
| +++ SERVICES LINE-UP |
Contact [email protected] if you want your company here.
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- Find new bilingual sales staff -- a specialty for DaiJob.com,
[email protected] Ph: 03-3499-3040
BiOS is Recruting Due to continuing expansion of our systems integration and outsourcing > businesses, BiOS is actively recruiting BILINGUAL engineers and IT > trainees. Wide range of positions open, with competitive salaries and > working conditions. Join our team of more than 50 engineers and get > the BiOS stamp of quality on your resume. |
| +++ NEWS |
- Dell laptop explodes into flames
- Debt hits JPY827trn
- Major SI'ers outsource more to China
- Murakami fine of JPY13bn?
- Internet sideswipes AB-ROAD
-> Dell laptop explodes into flames
According to The Inquirer in the USA, a Dell laptop
suddenly burst into flames at a conference here in Japan
last week. The photos (see link below) are quite
spectacular, and clearly show not just a bit of smoke, but
full-on flames and explosions. Apparently the conflagration
lasted for about 5 minutes. ***Ed: Luckily no one was hurt,
but one can imagine what would have happened if this
laptop had of been used where it was originally intended --
on someone's lap!
** (Source: TT commentary from theinquirer.net, Jun 21, 2006)
http://www.theinquirer.net/?article=32550
->Debt hits JPY827trn
In case everyone thinks things are hunkey dory in
Japan, just remember the massive public debt. According to
the Finance Ministry, the nation's public debt is now a
record high JPY827.48trn (US$7.12trn), an increase of
JPY45.93trn from last year. This means that government debt
is now 160% of GDP, the highest in the first world.
(Source: TT commentary from moneycentral.com, Jun 23, 2006)
->Major Sl'ers outsource more to China
Both NEC and Hitachi have announced that they are
increasing the amount of software development they will
outsource to China by about 30%, in an effort to keep costs
down and to deal with a software engineer shortage here in Japan.
NEC says it will outsource sufficient work for 800 engineers,
to its China subsidiary NEC Solutions..
Hitachi says it is using a third party vendor and will send
sufficient volume for 2,000 engineers, up about 450
engineers from the current level.
(Source: TT commentary from nikkei.co.jp, Jun 25, 2006)
http://www.nni.nikkei.co.jp/AC/TNKS/Nni20060624D24JF289.htm
->Murakami fine of JPY13bn?
Although this news item came out last week, we thought it
was interesting to learn that arrested alleged greenmailer
Yoshiaki Murakami may be fined up to JPY13bn for his
insider deals over Nippon Broadcasting System (NBS).
Experts disagree on how much he will be fined, with the
most likely number being JPY3bn, being the proceeds from
the sale of his NBS shares last year. However, if it seen
by the court that he not only managed his fund but indeed
was effectively trading on his own account, then he could
be fined the amount involved in the actual transaction as
well -- being another JPY9.95bn.
(Source: TT commentary from asiamedia.ucla.edu, Jun 13, 2006)
http://www.asiamedia.ucla.edu/article.asp?parentid=47558
-> Internet sideswipes AB-ROAD
Even a savvy publisher like Recruit, the producer of the
hit free paper Hot Pepper, is not immune to the ravages of
the Internet on its traditional publishing. Recruit has
announced that it will discontinue its iconic overseas
travel magazine, AB-ROAD, from October. The magazine,
which first hit the book shelves in 1984, peaked in the
mid-90's with 350,000 readers. However, the current
distribution numbers have dwindled to only about one third
of that number. (Source: TT commentary from nikkei.co.jp, Jun 25, 2006)
http://www.nni.nikkei.co.jp/AC/TNKS/Nni20060623DA3J6231.htm
NOTE: Broken links
Many online news sources are now removing their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.
Why Guthy-Renker trusts So-Fast Corporation? Failed logistics is a frequent reason why foreign import/retail companies in Japan eventually pull out. In the start-up phase, management is focused on just getting the business up and running, and so it is tempting to abdicate the logistics to a large trading or transportation firm. But the reality is that the convenience is soon replaced by frustration -- as any change request, any problem resolution takes forever and becomes "too hard to do". Now, So-Fast Corporation offers its "Start Logistics Package" which includes: 1. A reasonable and set price, 2. Simple distribution, and 3. Quick, customer-oriented service to satisfy end-customers. Guthy-Renker is one such company that trusts So-Fast Corporation. You may have seen their products on TV, as they are one of Japan's largest TV marketing. If logistics are a key part of your success in Japan - get connected with So-Fast. |
| +++ CANDIDATE ROUND UP |
DaiJob, Inc's executive placement team, Daijob Consulting
-----------------------------------------------------------------------------------------------
DaiJob has great candidates. Contact Andrew Peters at
[email protected], or Ph: 03-3499-3040 for details.
-> Senior Manager, Project Management
Male, 35, native-level Chinese & English, fluent Japanese
Experience:
- Project/program management, well-reputed methodologies
- Senior project manager of global insurance group
- Established new teams & process departments
- Staff management, strategic planning, budget control
- Confident presenter, excellent communication across all levels; advisor to senior execs, board members
- Previously, Operations Manager, Japan branch of global translation/localisation provider
- General hw/sw familiarity, TCP/IP, RAS, LANs/WANs
*Looking for JPY12M. Available 1 month's notice.
--------------------------------------------
-> Logistics/Distribution (Import) for IT industry
Male, 38, native Japanese, business English
Experience:
- 14yrs in logistics & distribution
- Import Cargo Representative for freight-forwarding agency
- Logistics Manager for global IT manufacturer
- Maintained 100% on-time delivery
- 10% to 20% reduction of storage-related costs
- Managed logistics accounts of 5 maor IT firms
- Practical knowledge of cost and performance management
- Knowledgeable in handling IT/Network, medical, and mechatronics equipment
* Looking for JPY6M. Available immediately.
- 3yrs+ in the Internet Business division of leading Japanese electronics manufacturer
- Led launch, development, budgeting and day-to-day workflow of digital content services
- HDTV, Broadband Internet Video, Mobile Wireless, Interactive DVD platforms
- Key contributor to digital music and e-commerce projects
- Excellent academic history in Computer Science and IT Business Management
- US Masters degree in Music Business
--------------------------------------------
-> Manager, Digital content/entertainment
Male, 27, native-level Japanese & English
Experience:
* Looking for JPY8M. Available from July.
DaiJob has great candidates. Contact Andrew Peters at
[email protected], or Ph: 03-3499-3040 for details.
| +++ UPCOMING EVENTS/ANNOUNCEMENTS |
Entrepreneur Association of Tokyo July 11th - Speaker: Tim Romero Presentation Title: "The Micro-Multinational Corporation - How outsourcing and offshoring can be a viable strategy for small and medium sized businesses." Tim will be discussing the alignment of interests, communication, and quality control not only for software development, but for task and process outsourcing in general. And perhaps, most important, how to tell if outsourcing will actually save you money. Date/Time: Tuesday, July 11th 7:00 pm Location: City Club of Tokyo, Maple Room (Canadian Embassy) Language: English Website: http://www.ea-tokyo.com Email: [email protected] |
IT events announcements are priced at JPY50,000 per week. |
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| +++ ABOUT US |
Written by: Terrie Lloyd[email protected].
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