FW-60 -- Give the Government Less Money! - Really?

J@pan Inc Magazine Presents:

* * * * * * * * 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, June 14, 2005 Issue No. 60

- What's New (Give the Government Less Money! - Really?)
- Frugal Friends (Need a Good Hair Trim in Osaka?)
- Frugal Tips (Shipping!)
- Credits

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+++ WHAT'S NEW (Give the Government Less Money - Really?)

Dear Frugal Readers,

The word "tax" in any ezine title seems to automatically
induce drowsiness, so I thought I'd try a slightly catchier
hook for this week's main article. Japan's top tax-reform
committee recently recommended a major change to the
current tax code that would both simplify the current tax
system, and could eliminate some nasty tax burdens on foreign

The main change is a merging of the two current tax systems:
the jyuminzei (local tax) and shotokuzei (income tax) systems.
Jyuminzei are local taxes that are administered by your local
government body. If, for example, you live and work in Shinjuku
Ward of Tokyo, then Shinjuku Ward will be in charge of taxing
you. Shotokuzei is regular national income tax, administered
by the national government. National tax rates are the same
throughout Japan, but local/resident taxes differ.

The major difference between these two tax systems lies
in how they are collected. Income taxes are (for most full-time
company/government employees) calculated and charged monthly
based on your current income. Resident/local taxes, however,
are based on your PRIOR year's income, and are collected from
June the FOLLOWING year for twelve months. So, for example,
while your 2005 income taxes are based on your current 2005
salary and are paid from January through December 2005, your
resident/local taxes are based on your 2004 salary and will not
be paid until June 2005-June 2006!! Both income taxes and
resident taxes are typically withdrawn from your salary by your
employer, but this is not the case with self-employed persons,
part-time workers, and others.

So, basically, what does this mean? Some nasty surprises.
Ever heard of a foreign resident in Japan suddenly getting
a very large tax bill in the mail, about a year and a half AFTER
they arrived despite having never been taxed before? Well,
the explanation is simple: The first year of their residence
in Japan they were not charged residence taxes because
they had no recorded income in Japan. Their second year
in Japan, their resident taxes start accruing, based on the
prior year's income. In late May or early June, the tax bill
arrives, usually to the person's home! Also, because of
the six-month lag in tax payment (resident/local taxes
accrue from January but are not billed until June), a
foreigner leaving Japan can often be hit up with big tax
bill right before departure: their Jan-June 2005 tax bill,
for example, even if they are leaving in June!!!

The final nasty surprise can come for people who have
switched jobs and taken a salary cut, gone freelance,
or for some reason seen their income go down (became
a part-timer, stay-at-home Mom/Dad, etc.). Despite
earning less income (which their income tax reflects),
their resident/local taxes are still very high because
they are based on the PRIOR year's salary. So while learning
to live on less, they are still liable to a high tax bill,
which can put a real pinch in the budget.

What will the proposed changes to the tax code do?
Simply put, they will adjust the resident/local tax system
to that of the income tax system, eliminating many of
the surprises mentioned above. The government is also
studying ways to eliminate a "double taxing" of two years'
residential taxes at once. Will you end up paying less to
the government? In the end, the answer is probably
no - there will just be fewer "surprise tax bills" in the
mail, but more accurate paycheck deductions. Hope
this was helpful!

Frugally yours,
Wendy J. Imura

PS: Tax system information was taken from the
11 June 2005 "Nikkei Shinbun"article "Jyuminzei,
shotokuzei to toitsu."

=== Entrepreneur Association of Tokyo - July 5th Seminar ===

This coming July, EA-Tokyo is lucky to have well-known
entrepreneur, Fujiyo Ishiguro, President and CEO of Netyear
Group Corporation. For more information please visit the
EA-Tokyo website listed below.

Date/Time: Tuesday, July 5th 7:00 pm
Location: City Club of Tokyo - Maple Room
(Canadian Embassy Complex)
Language: English
Website: http://www.ea-tokyo.com
Email: info@ea-tokyo.com

+++ FRUGAL FRIENDS (Need a Good Hair Trim in Osaka?) ++++

Welcome to a new section on Frugal Watch: Frugal Friends!
In this corner, we introduce foreign-owned or foreigner-friendly
businesses and services around Japan. If you know of a Frugal
Friend-worthy business, or would like to introduce your own
business to our nearly 1,000 readers, email Wendy J. Imura

"BOY" - Cut/Color/Perms Without Worry in Shinsaibashi,
Osaka! Finding a foreigner-friendly place to get a haircut in
Japan can be quite stressful, especially if you color your hair,
don't speak great Japanese (hard to explain your desired style
through gestures alone), or simply have had a 'bad experience'
before. BOY, a small salon in Osaka, offers a friendly,
convenient location, English-speaking stylists (ask for Ai Nishino),
and great prices - a 20% foreigner discount to boot! The salon
seems particularly popular with NOVA teachers and other locals,
and many are long-term clients.

'BOY' Higashi Shinsaibashi Bldg. 5F
(1-minute walk from Shinsaibashi Station, Midosuji Subway Line, Osaka)
TEL: 06 6252 7630
Call in advance for directions!
Cuts (20% of these prices): cut, 4,500 yen; color, 8,000-10,000 yen

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+++ FRUGAL TIPS (Shipping WITHIN Japan)
Shipping something large and bulky within Japan? Check out the following
tip from Frugal Japan's YahooGroup (about shipping a double bed within
the same prefecture).

"If you live within the Kanto area (Tokyo and surrounding
prefectures), you can probably call and use the Moving.co.jp's "Nan
de Mo Bin" ('We Move Anything') service. It's like takyubin
(delivery service) for larger things. You can even do "chakubarai,"
or cash on delivery.

If you manage to get the bed to the curbside, they can deliver it
within the same prefecture for 5,250 yen. Having them carry the bed up
the stairs/elevator adds 500 yen. I've used this service to send a bed
frame, a bed mattress, a TV/VCR/stereo combo, and a sofa across
Kanto with no problems. Their webpage is here:

Call 0120-00-6019 and ask for the "Nandemobin." You will need the
exact details of the two addresses (the sender/sendee), the phone
#s, and the date you want it picked up/delivered. It takes a minimum
of three days in between, but they can hold the item for a week or
so if necessary."
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Written by: Wendy J. Imura (frugalwatch@japaninc.com)
Edited by: JI

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