Japan by the Japanese/Chapter 15.6

In 1897–98 and the following years five of the principal taxes levied by the central Government were abolished. These were the confectionery tax, the tax on vehicles, the tax on vessels, the fishery dues in the Hokkaido, and the tobacco tax. This last-named was removed on the institution of the tobacco monopoly.

The land tax was instituted in 1873. The earliest law was directed to the substitution of the former system of collecting land tax in grain, according to the area of rice-fields and farms, by a system of collecting the tax in cash, according to the value of land, and for this purpose an elaborate general assessment of the value of the land of the whole country was commenced in 1873, and was completed in 1882. As, however, the conditions of land were constantly changing, repeated readjustments have been made since 1882 by comparing the actual conditions of land with the official registers of land.

The rate of land tax was at first fixed at 3 per cent. of the assessed value of land, and in 1877 reduced to 2½ per cent.; but subsequently, owing to financial necessity, the tax was increased for five years, from 1899 to 1903, to the rate of 3.3 per cent. of the value of land on rice-fields, farms, building sites in Gun (districts) and Son (villages), hills and plains, and 2½ per cent. on building sites in Shi (cities). In 1903 it was reduced to 2½ per cent. Owing to the rise in the price of the produce of land, notably rice, the real value of land has been at least trebled on the average since its legal value was fixed as the basis of taxation, so that there is at present a wide discrepancy between the real and legal values. Therefore, even with the ​above-said increase, the rate of the tax on land is not much more than 1 per cent. of its real value. In fact, increase on the land tax to 3.3 per cent. was only a partial offset for the relative reduction of the burden of landowners that has automatically come about since the time of the land-tax reform. In 1873 the receipts from this tax were 60,604,242 yen; in 1882–83 they were 43,342,188 yen; in 1892–93, 37,925,243 yen; and in 1903–04, 46,996,212 yen.

The business tax, which was created in 1896, is imposed generally on commerce and industry. As the commerce and industry had hitherto often been taken as the sources of local taxation, businesses of smaller scales are exempted from the new business tax and reserved for local taxation. For the purpose of taxation all kinds of business are classified in nine categories, and for each of these classes different bases of assessment and different rates of tax are established, so as to maintain equality of burdens among different kinds of business.

The importance of the business tax as a national tax lies in its bearing on the distribution of franchise, for the payment of a certain amount of direct national tax is one of the qualifications of a voter for the members of the House of Representatives. While the payers of the land tax are mostly of the agricultural class, the payers of the business tax are mostly of the commercial or industrial class. The introduction of the business tax, therefore, was calculated to counteract the political preponderance of the agricultural population in some measure.

The following are the principal businesses specially dealt with. The rate of the tax varies considerably: Sales of wood; banking, insurance, money-lending, and letting of goods; warehousing; manufacturing, printing, and photographing; transport, exploitation of canals, piers, docks, wharfs, etc.; contracting for engineering works or for supplying labourers; letting of chambers and salons for special occasions; restaurants; inn-keeping; public intermediation, agencies, commission business, brokerage, etc. In 1902 railway business was also taxed. In 1897–98 the business tax brought in 4,416,249 yen, and in 1903–04, 6,792,818 yen.

The income tax was created in 1887, and is imposed upon incomes above 300 yen derived from property, trade, or business or other sources.

The rates of the tax were revised by the Income Tax Law of 1899 as follows:

Class I.—Incomes of juridical persons, ⁠25/1000⁠.

Class II.—Interest on public loan bonds or companies’ debentures payable in places where this law is in force, ⁠20/1000⁠.

Class III.—The rates on incomes not belonging to the two ​preceding classes range from ⁠55/1000⁠ on incomes of, or over, 100,000 yen to ⁠10/1000⁠ on incomes of, or over, 300 yen.

The important points of the revised law are:

The tax is imposed upon juridical persons. As the result of the treaty revision, the tax is imposed, not only upon the subjects of the empire, but also upon foreigners domiciled or residing for more than one year in places within the empire where this law is in force. Persons not domiciled or residing within the empire, but having property or trade, business or occupation, in places within the empire, are liable to pay income tax, but in respect only of the income derived therefrom. Incomes derived from agricultural land are calculated upon the average of the incomes for the three preceding years.

No income tax is levied on the following incomes:

1. Salaries of persons belonging to the army or navy while engaged in war.
2. Pensions to wounded or invalids.
3. Money received for travelling expenses or educational expenses, and legal allowances granted to widows and orphans, etc.
4. Income of juridical persons, the object of which is not to make a profit out of their business.
5. Occasional incomes not derived from undertakings conducted for profit.
6. Incomes realized from property, or from a trade, business, or profession in a foreign country, or in places where the law is not in force, except the income of a juridical person having its head office in a place where this law is in force.
7. Dividends receivable from a juridical person upon whom the income tax is imposed under this law.

In 1887–88 the revenue from the income tax was 527,724 yen; in 1897–98 it was 2,095,092 yen; and in 1903–04 it was 7,412,801 yen.

The tax on saké has undergone considerable changes since it was created in 1871. There are the following five varieties of saké specially dealt with under this tax. These are Seishu (refined saké), Mirin (sweet saké), Shirozake (white saké), Meishu (a sort of mixed saké), Dakushu (unrefined or muddy saké).

In 1901 the rate of tax was as follows:

In the above table the quantity of alcohol is denoted by the percentage of alcohol of a specific gravity of 0.7947 contained in the original fluid at a temperature of 15° C.

​A tax shall be levied at the rate of 75 sen for each 1 per cent. of pure alcohol contained in 1 koku of the original fluid. In no case, however, shall the rate of this tax fall below 16 yen per koku.

In 1874 the receipts from the saké tax were 1,683,530 yen; in 1883–84, 13,490,730 yen; in 1893–94, 16,637,436 yen; and in 1903–04, 66,535,404 yen.

The soy tax was first imposed in 1885 and in 1899, and the rates of the tax were: Brewing tax on soy, 2 yen for each koku of Moromi (grounds for making soy); and for Tamari (soy before it is pressed), 2 yen for each koku manufactured. In 1900 the tax on soy for household use was created, the rates being not less than 1 yen and not exceeding 4 yen. No one is allowed to manufacture more than 5 koku of soy per annum for household use. In 1885–86 the receipts from this tax were 640,179 yen; in 1896, 1,463,073 yen; in 1903–04, 3,444,034 yen.

The sugar excise, introduced in 1901, is imposed upon sugar, molasses, or syrups, delivered at a manufactory, Customs house, or bonded warehouse, with a view to provide the same for inland consumption. The rates are as follows:

Class I.—Sugar and molasses below No. 8 of the Dutch standard, 1.00 yen per picul.

Class II.—Sugar above No. 8 and below No. 15 of the Dutch standard, 1.60 yen per picul.

Class III.—Sugar and syrups above No. 15 and below No. 20 of the Dutch standard, 2.20 yen per picul.

Class IV.—Sugar and syrups above No. 20 of the Dutch standard, 2.80 yen per picul.

In 1903–04 the revenue from this tax was 7,184,637 yen.

The tax on bourses, after it had undergone frequent changes, was fixed in 1885 at the following rates:

Upon the time transaction of rice, ⁠2/1000⁠ of the value transacted.

Upon the time transaction of public loan bonds, ⁠3/1000⁠ of the value transacted.

Upon the time transaction of stocks and shares, ⁠6/1000⁠ of the value transacted.

These taxes are collected from the bourses themselves.

The rates of the tax were further changed as follows:

Upon the transaction of goods and negotiable papers other than national and local loan bonds, ⁠6/10000⁠ of the amount transacted.

Upon the transaction of national and local loan bonds, ⁠3/10000⁠ of the amount transacted.

In 1886–87 this tax produced 269,111 yen; in 1896–97, 1,106,208 yen, and in 1903–04, 1,030,605 yen.

​Since 1899 the issue of the bank-notes against the security reserve within the limit prescribed by the law is subjected to a tax of ⁠12.5/1000⁠ per annum of the monthly average amount of issue, deducting that part of it advanced to the Government, or others without interest or with interest below ⁠10/1000⁠ per annum, under the special order of the Government.

In 1903–04 this tax produced 1,149,616 yen.

The mining tax was originally enacted in 1875, when provision was made for the rate of ½ yen for 100 tsubo in the case of iron-mines, or mines of all non-mineral substances; 1 yen in other cases per 100 tsubo. In 1890 additional measures were enacted. There was a tax on mining businesses of 30 sen for 1,000 tsubo (iron-mines exempted), and a tax on mining industry of 1 per cent. of the value of products (iron-mines exempted). In 1875 the tax produced 44,492 yen; in 1885–86, 18,346 yen; in 1895–96, 241,418 yen; and in 1903–04, 759,578 yen.

Tonnage dues were introduced in 1899. Ships entering Japanese ports from a foreign country pay 5 sen tonnage dues for one registered ton or 10 koku of the real capacity, but if 15 sen are paid at once for the same capacity, they may enter the same port free of any tonnage dues during one year.

In 1903–04 this produced 348,726 yen.

The tax on patent medicines collected at the following rates according to the patent medicine regulations of 1877:

Dealers in patent medicines, business tax 2 yen per annum for each kind of medicine; license fee 20 sen per annum for each kind of medicine.

Retailers or peddlers of patent medicines, license fee 20 sen per annum, without regard to the number of the kinds of medicines.

Further, the patent medicine stamp duty regulations were enacted in 1886, which required a stamp of the proper amount to be pasted on the packet of patent medicine.

Subsequent to 1897, the receipts derived from the stamp duty above-mentioned are included in the general stamp revenue, special kinds of stamps for patent medicine being abolished.

From 28,455 yen derived from this source in 1876–77, the revenue had grown to 119,410 yen in 1903–04.

A tax on saké exported from Okinawa prefecture was introduced in 1888. Okinawa prefecture, a group of small islands at the southern end of the main island of Japan, is entirely exempted from the operation of the saké tax law, but if saké manufactured in these islands is exported it is subjected to a ​tax about equal to the ordinary saké tax, in order to prevent undue competition.

The revenue from this tax was 144,148 yen in 1903–04.

The Customs duties were but a scanty source of revenue in the opening years of the present era, owing to the limitation of their rate by the old treaties to 5 per cent. ad valorem, in the case of both exported and imported commodities, as well as to the small volume of the foreign trade. For some years, indeed, the Customs receipts did not exceed 3,000,000 yen. But in consequence of the remarkable growth of commerce, the revenue from the Customs duties increased considerably in later years, even under the highly unfair conventional tariffs, and amounted to 9,000,000 yen in 1898. In addition to this, the following year saw the revised treaties put in operation, which in a large measure restored tariff autonomy to our country. Since then export duties have been entirely abolished, and a statutory tariff has been and is, generally, applied to imports, the rates of duties varying from 5 per cent. to 35 per cent. ad valorem, according to the kinds of commodities. A marked increase in the revenue from the Customs duties at once resulted from the application of the statutory tariff, as will be seen from the receipts for 1899 and 1900, which were respectively 16,716,382 yen and 15,870,335 yen. Henceforth the Customs duties may be counted as one of the chief items of the national revenue. Besides, the Government has now greater freedom in regulating certain imported articles, corresponding to the internal taxes on similar articles, as has already been done in the case of saké and tobacco. Tariff autonomy has been recovered so far as the general principle is concerned. It is to be regretted that the rates of import duties on certain important commodities are still limited by the conventional tariffs in the treaties with foreign countries. What the nation aspires to is the total abolition of the unilateral obligations imposed upon her by the existing conventions.

The revenue from the Customs duties was in 1867–68, 720,867 yen; in 1877–78, 2,358,654 yen; in 1887–88, 4,135,652 yen; in 1897–98, 8,020,513 yen; and in 1902–03 it reached the sum of 17,045,611 yen.

The total revenue from the above taxes increased as is shown in the following table:

​Besides the taxes given above, there are the stamps necessary upon many documents, etc. These are classed under the general head of ‘stamp receipts,’ and include registration fees, stamps for patent medicines and legal documents, license fees for hunting, civil lawsuit stamps, examination fees, charges and dues levied according to the Customs law, and other regulations accompanied therewith, etc. In 1875–76 the stamp receipts amounted to 700,751 yen; in 1885–86, to 709,701 yen; in 1895–96, to 900,980 yen; and in 1903–04, to 13,532,121 yen.

The per capita charges of the taxes and of the national debts had reached in 1900 the sums indicated below: