The Finance Ministry will levy corporate tax on income from home nursing-care services for the elderly provided by nonprofit organizations, ministry officials said Wednesday.

The ministry will notify regional tax bureaus after the Golden Week holidays in early May of its policy for taxing new nursing-care services that started this month, they said.

Many people have been hoping NPOs can offer nursing-care services in rural areas and places with low populations, because the poor prospects for profitability and efficiency discourage joint-stock companies and other private-sector concerns from running services in such areas.

But there are fears that many NPOs might refrain from launching nursing-care services if they are subject to taxation.

NPOs and citizens groups jointly asked the Finance Ministry and the Health and Welfare Ministry on Wednesday to overrule the plan.

About 300 groups argued that the nursing-care services currently being provided by NPOs are not intended as profit-making activities.

The groups also claimed it was unfair that nursing-care services provided by social welfare organizations are free from corporate tax while those provided by NPOs are not.

“Each organization has made operating plans on the basis of being granted preferential tax treatment. If NPOs are taxed, their operations will not be economically viable without greater revenues from nursing-care services,” an NPO member said.

Tax authorities have decided to regard NPOs’ home nursing-care services for the elderly and welfare facilities for the elderly as taxable medical care and health businesses.

An NPO with annual income of up to 8 million yen from such services will be taxed at a rate of 22 percent, and at 30 percent for revenue over 8 million yen.

A rule on the enforcement of the nursing-care insurance law says that such services provided by social welfare corporations are tax-free.

Both NPOs and social welfare corporations exist for nonprofit purposes, but the former’s nursing-care services will be regarded as taxable and the latter’s as tax-free, implying unfair treatment.

But tax authorities claim it is not unfair because corporations for public purposes, agricultural cooperative associations and corporations other than joint-stock companies are all subject to taxes if they provide nursing-care services.

About 400 NPOs had applied to the Health Ministry as of April 2 for registration as providers of home nursing-care services for the elderly, the ministry said.