Bill on nonprofit organizations clears panel

The Lower House Committee on the Cabinet passed a bill June 5 that would grant corporate status to volunteer and other citizens’ groups and recognize them as official nonprofit organizations.

The Liberal Democratic Party, Social Democratic Party and Democratic Party of Japan voted for the bill, while Shinshinto and the Japanese Communist Party voted against it. The bill, partly amended from an earlier version to promote activities of nonprofit groups, is expected to clear the full chamber at a plenary session June 6 and to be sent to the Upper House.

However, the bill is unlikely to be passed this Diet session, which is scheduled to end June 18, because little time is left for the Upper House to deliberate on it. The proposed legislation is aimed at fostering a third sector of society, next to the public and private sectors, at a time when the public has begun to recognize the roles of nonprofit groups.

The original bill was drafted by the LDP together with the SDP and New Party Sakigake, its two non-Cabinet allies. Sakigake does not hold a seat on the Lower House committee. It was revised to widen the definition of official nonprofit organizations by incorporating proposals from the DPJ.

Shinshinto demanded unsuccessfully to include a provision to provide such groups with some tax breaks to strengthen their financial basis. “A bill that does not include any tax relief measures for NPOs would not be of much use. Such measures are something that citizens’ groups strongly desire,” said Takashi Kawamura, a Shinshinto Lower House legislator who is a member of the committee.

The LDP refused, saying such measures could only be taken after consulting with the government’s tax committee and the Finance Ministry. Instead of the provision, the LDP, SDP and DPJ adopted a resolution after the vote urging the government to review tax-related matters involving nonprofit organizations within two years of the passage of the bill.

Shinshinto criticized the nonbinding resolution, terming it “just lip service.”