5th Report of Market Access Ombudsman Council (March 17, 1998)

7-(1) Improvement of tax payment method for postal matter from abroad

1. Complainant: Japan Foreign Trade Council, Tokyo Chamber of Commerce and Industry

2. Ministry concerned: Ministry of Finance, Ministry of Home Affairs

3. Background:

(1) When postal matter from abroad containing dutiable content is received, the customs house sends the addressee a notice of duties due through the post office. The post office must deliver the notice of duties due to the addressee before releasing the postal matter.

Foreign postal matter on which the amount of duties (customs duty, and national and local consumption tax) assessed is under ¥10,000 is delivered at the same time as the notice of duties due, and the postal matter is handed over to the addressee in exchange for payment of duties. When duties due on foreign postal matter exceed the amount of ¥10,000, the notice of duties due is sent to the addressee first. The addressee must go to the post office where the postal matter has been held and may collect the postal matter once the duties due have been paid (Customs Law, Article 77, International Postal Matter Regulations, Article 72).

(2) The local consumption tax on dutiable articles is assessed based on the taxation on cargo basis (for import transactions, a tax base of its taxation on cargo basis is an amount of consumption tax for dutiable goods) of the prefecture where the bonded area is located (when dutiable goods are imported from other than a bonded area, the prefecture where the customs office with the Director-General of customs assessing the duties is located), payable by the person picking the postal matter up from a bonded area. The government collects the taxation on cargo basis in the same way that the consumption tax is collected, together with the consumption tax.

The taxation on cargo basis paid to the government first goes into the National Tax Receipt Fund and is then paid out to the prefecture where the bonded area is located (when dutiable goods are imported from other than a bonded area, the prefecture where the customs office assessing the duties is located). (Local Tax Law, Article 72-78, Article 72-100, Article 72-103; Law on the National Tax Receipt Fund, Article 2)

4. Complaint:

Duties on foreign postal matter had previously been payable in revenue stamps, but the payment method was changed to cash after introduction of the local consumption tax. When payment is in cash, company employees must obtain a temporary payment in advance or pay out of their own pockets in lieu of the company, and this is very inconvenient in the case of small postal items. In order to improve the efficiency of payment of duties on samples, etc. at the time of import, the Complainant believes that payment of duties on foreign postal matter should be allowed to be made using revenue stamps, as before.

5. Results of deliberation:

It is taken for granted that the government should always have the convenience of taxpayers foremost in mind. The ministries concerned give the reasons for changing from payment of duties on foreign postal matter in revenue stamps to cash as follows:

(1) revenue from revenue stamps goes into the national government's general accounts budget, and accordingly it is not possible to pay for local consumption tax, which is a local tax, using revenue stamps;

(2) since it is not desirable from the viewpoint of taxpayers' convenience to pay the national tax portion of the assessment using revenue stamps and the local tax portion in cash, the tax law states that local consumption tax shall be paid together with the national consumption tax.

Although the ministries' concern for taxpayers' convenience is laudable, what the government believes in convenient and what taxpayers actually experience in some cases does not necessarily coincide, and as a matter of fact, the Complainant feels inconvenienced by the current method of paying in cash.

Further, although the ministries have stated to the Complainant that the problem of having employees pay out of their own pockets in the company's stead can be remedied by changing company accounting systems, the government should show more willingness to consider the actual convenience of taxpayers, without insisting unduly on existing methods.

Based on these circumstances, the following measures should be taken:

In addition to paying in cash, the Complainant suggested allowing payment of duties on foreign postal matter to be made using a combination of revenue stamps and prefectural revenue stamps. A study as to the feasibility of this method should be undertaken immediately and a conclusion should be reached during FY 1998.

Government decision (March 23, 1998)

4-(1) Improvement of tax payment method for postal matter from abroad

Study will be undertaken immediately concerning whether, in addition to payment of duties in cash, parties may be allowed to pay duties on foreign postal matter in a combination of revenue stamps and prefectural revenue stamps, and a conclusion will be reached during FY 1998.