Stricter restrictions should be imposed on the current tax exemption criteria for nonprofit organizations, as many NPOs take advantage of the system and retain enormous profits, a working group of the government Tax Commission said Friday.

“If these bodies compete with companies in the private sector and retain their profits (without being taxed), the system should be reformed,” said Naoki Inose, a writer and member of the working group, which is headed by Tadatsune Mizuno, professor of Hitotsubashi University.

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