The Social Security and Tax Number System (My Number) went into effect in Japan during January.
The Japanese government began distributing numbers in October, and every citizen in the country now has a number. Everyone in Japan was notified of their numbers last November by mail. Persons who obtained numbers were those identified with a local registration and are termed “residents”. Some people were not counted, and did not receive their Tax Number (probably limited to the homeless). Almost all citizens in Japan can be identified by a number; this system is similar to the social security numbering system in the U.S., but there are several significant differences.
The government will provide a photo ID card with the recipients “My Number” information if requested. This is beneficial to those who do not have any form of government ID such as a driver’s license or passport. All prescriptions for medications will now be linked to this number even though a patient can have multiple prescriptions at different medical facilities. The current system for administrating prescriptions is a little overwhelming. Each clinic or hospital provides one patient card to use as ID; it is not unusual for patients with multiple prescriptions to have more than 10 ID cards. I am not sure how this system will work because there are several administrative systems used to dispense and bill for medications; I am not sure if a single standardized process can be implemented seamlessly.
A few experts in the health care field tried to explain the potential problem with the “one card system” by comparing it to the credit card industry. The article asked the consumer to open their wallets or purses, and count how many credit cards are in their possession; most of us have at least three or four different cards that we use regularly depending on the merchant. One card can’t be used everywhere, and the consumer wants choices with their method of payment, or which lender to use at any given time in the month. It does not make sense to be limited to one credit card in the free market place, nor does it make sense to use one card provided by the Japanese Government for medical purchases. In my opinion, I don’t think it is practical to think that the new card will cover everything in a global market. The new Tax Number System will be financially beneficial to the government from the increased tax revenue. Employees who are wage earners will not feel the effects of the tax increase; however, the self-employed and the small business owner as well as the wage earner who moonlights and takes side jobs will take this one on the chin. The previous tax system had a few loopholes and was short on accountabilities when taxing the self-employed and the moonlighters. The new tax system with My Number will significantly reduce tax evasion.
However, there could be avenues to help skirt the amount of tax one should pay. Recently, I read a few advertisements that were aimed at those trying to legally protect their secondary income from the new tax system. The My Number Act will also be financially beneficial for IT companies in Japan. The government budget to implement the software and hardware is around $10 billion – this be a windfall for the IT companies. Japanese companies will have to upgrade their computers and software packages, and this will also create a business opportunity for electronics and system engineering. Electronics and system engineering is protected against foreign competition in Japan.
So, I guess you could say the new My Number Act does not provide a remarkable financial benefit for the Japanese people, but it certainly does for government and IT companies. The Japanese government has been trying to control the country through a centralization of power over the last century. The My Number Act could be a small step towards this goal.
Dominique K. Numakura
DKN Research (dknresearchllc.com)
DKN Research Newsletter #1606, March 6, 2016 (English Edition) (Micro Electronics & Packaging). For newsletter archives, click here.
Headlines of the Week
1. Murata developed a heat-resistant ceramic capacitor “GCB Series” assuming applications in engine rooms. It survives at 200 degree C.
2. Hitachi Zosen developed a high reliability all solid-state lithium ion battery introducing a sulfide compound. It has a longer life between -40 and +100 degree C.
3. Asahi Glass commercialized a cover glass for fingerprint sensors of mobile devices such as smart phones.
4. Toppan Printing developed a photo mask for next-generation EUV lithography processes, minimizing unnecessary reflections.
5. Tamagawa University developed a new design method of Quantum Radar Cameras for automatic drive system of the automobiles.
6. Tohoku University demonstrated a compressor with a new motor as an application of new nano-crystal alloy. The total efficiency was improved 3% by the trial.
7. Kaneka codeveloped a wall hanging type solar cell panel module with a low reflection rate with NEDO.
8. KOBELCO will invest 500 million yen to build a Total Test Center of Hydrogen Station for the field test of the fuel cell automobiles.
9. Tokyo Institute of Technology codeveloped a new wireless access network at 40GHz/60GHz band for next generation high speed content service with large capacity with Sony and Japan Radio.
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