Lawmakers received dubious tax breaks

Kyodo

At least 17 lawmakers received questionable tax breaks between 2009 and 2011 by moving donations they made to local chapters of their political parties to fund management groups, it was learned Sunday.

Politicians are unable to receive income tax breaks if they donate money directly to their own fund management groups.

Of the 17 politicians, 12 were from the Liberal Democratic Party, two from the Democratic Party of Japan and three from Nippon Ishin no Kai (Japan Restoration Party). Other lawmakers questioned on the matter have refused to respond to inquiries from Kyodo News. Among them are Senior Vice Environment Minister Shinji Inoue and Shinpei Matsushita, parliamentary vice minister of land, infrastructure, transport and tourism.

The three Nippon Ishin lawmakers benefitted from the practice when they were local LDP assembly members.

At least ¥142 million from the 17 politicians’ accounts shifted between the local chapters and fund management groups.

When an individual donates to a political party or its local chapter, a tax break is provided either by deducting about 30 percent of the donated amount from total income tax or subtracting the donated value from taxable income. But the 17 lawmakers received income tax credits by shifting the money from local chapters that they ran to their own fund management groups.

While there is no regulation prohibiting this practice, it raises the question of how such lawmakers view their legal obligation to pay taxes.