FW-38 -- Nenmatsu chosei

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* * * * ** * F R U G A L W A T C H * * * * * * * *
A weekly roundup of how to be frugal in the world's most
expensive country to live (unless you read this!), written
and compiled by Wendy J. Imura.

Regular edition, December 19, 2004 Issue No. 38

- What's new
- Weekly Bargain Roundup
- Frugal tips
- Credits

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Dear Frugal Readers,

As the year winds down to a close, you might find a nice
little surprise in your paycheck for December. It's called
'nenmatsu chosei' -- and simply is a tax payback (or payment,
in some cases) carried out at the end of the year in Japanese
companies for employees. While Americans and other foreign
residents of Japan may be more used to filling out tax returns
every year, most Japanese people don't do that. Instead, their
companies automatically do an 'audit' at the end of the year,
resulting in a little bonus in their December paychecks. If
you work as a regular or contract employee for a Japanese
corporation (or foreign company that pays according to the
Japanese system), this might apply to you.

Unfortunately, the winds of change are blowing around Japan's
tax system, and the outlook is not good, especially for salaried
folks. Although Japan's tax policy for the next few fiscal years
is usually revised in December, the latest round of changes was
a doozy. I thought I'd outline some of the major changes for my
Frugal Readers, as knowing what's going on with your paycheck is
a very important issue in controlling how you spend, and save,
your money.

The biggest issue for 2004 was a reduction in fixed-rate
income tax cuts, or 'teiritsu genzei.' In 1999, the government
passed a law cutting income tax rates by 20%, and local rax
rates by 15% across the board. This was supposedly a permanent
tax cut measure aimed at jump-starting the economy during the
Obuchi administration. Unfortunately, Japan's government deficit
is ballooning, and these tax cuts will be halved starting in
2005, and fully repealed in 2006. This is bad news, mainly for
higher income families -- a two-parent, two-child family earning
7 million yen a year would see an increased tax burden of
80,000 yen per year (estimated).

This major increase in taxes unfortunately coincides with
a number of other tax/social welfare payment hikes
scheduled to begin in 2005/2006. Corporate pension premiums
(kosei nenkin) are forecast to edge upward every year from
13.934 percent until reaching 18.3 percent in 2017.
Japan's tax exemptions for dependent spouses are also
set to be phased out, and contributions to unemployment
insurance and national health insurance are forecast
to rise. According to the Nikkei Shimbun, it is expected to
raise the burden on taxpayers by 1.6 trillion yen altogether.

So, in short, taxes are going up. But, the tax hikes have
been constructed in ways you are unlikely to notice -- small,
incremental deductions to your paycheck every month.

My advice is to read your pay stub carefully, and save
them for at least several years to keep track of how much is
being deducted. If you have a hard time understanding your
pay stub, use www.alc.co.jp'sEnglish/Japanese dictionary to
help you get a rough idea of the terms, at least. Knowledge
(even of how your taxes are going up)is power.

Frugally yours,
Wendy J. Imura

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Why is it every Christmas I spend in Japan has me longing
a little bit more for the traditions of home? As much as
I enjoy Japan's light festivals and low-key celebrations,
I do miss many of the trappings of Christmas. Most recently,
I discovered I missed Christmas movies. In particular,
Charles Dickens' "A Christmas Carol." After spending several
weeks obsessing over it, I finally broke down and bought the
DVD. There is, I found, a very good variety of versions
available, with both dubbed and subtitled formats
available for watching with Japanese friends/relatives.

Bill Murray "Scrooged" 1,690 yen
*For those of you that missed this for free on TV Saturday
night (12/18), the DVD version is on sale for 1,690 yen at
Rakuten. While the costumes and makeup SCREAM late 1980s,
it's a fun and entertaining film. Most Japanese
seem most familiar with this version of the story.

"A Christmas Carol" (With Patrick Stewart, 1999), 3,760 yen
*The most recent movie remake of the classic Dickens story,
featuring Patrick Steward of Star Trek Next Generation fame.
Lavish sets, but the supporting cast is a little lacking. Well
subtitled and dubbed though -- both versions available on the
DVD. However, a little pricey.
(Note the Rakuten price is 1,000 yen less than Amazon.co.jp)

A Christmas Carol (George C Scott, 1984) $11.24 + shipping
All right, I saved the best for last. This is THE classic
Christmas Carol movie version. Most of the dialogue is lifted
straight out of Dickens, the supporting cast is amazing,
and George C Scott's Scrooge is the most tempered, delightful
ever. A must! (now on DVD - no Japanese version available,

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Even though I generally try to avoid spending money at
Starbucks ("latte money" can total up to $1,000 a year for
one person if you bought one latte each day) -- I got an
unexpected treat from them the other day.

Upon purchasing my favorite Christmas drink (a White
Chocolate Mocha), I received a postcard coupon for a
"buy one get one free" drink good on any of their menu
drinks (same type and size). My husband also recieved
a coupon after trying their new Creme Brulee Mocha
(which is also quite good). Depending on which drink
you bought, you could save up to 500 yen
with this coupon. The coupon is good from December
26,2004 - January 10, 2005, and can be used at
Starbucks nationawide in Japan. Enjoy!


Subscribers: 552 as of December 19, 2004


Written by: Wendy J. Imura (frugalwatch@japaninc.com)
Edited by: JI

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