With local government finances dwindling, some municipalities and prefectural governments have started accepting credit cards for tax payments.
The governments are advertising the service as a convenient way to pay taxes. Plus there is an added bonus: People can get points from their credit card companies.
The town of Tamaki, Mie Prefecture, started accepting tax payments by credit card in April. With the start of the new fiscal year, the town, with a population of about 15,000, began accepting credit cards to pay for fixed asset and residential taxes as well as taxes on minivehicles and public utilities charges.
Tamaki officials said the town decided to accept credit cards to increase the collection rate and to make it more convenient for taxpayers who might otherwise have to come in to the town office to pay their taxes.
The system is similar to bank-account debiting, a common way of paying taxes. Taxpayers simply give their credit card numbers to the Tamaki town office and their credit cards are charged automatically.
The officials said 176 residents had registered for card payments as of the end of April, a higher figure than had been expected.
The Miyazaki Prefectural Government, now headed by comedian-turned-Gov. Hideo Higashikokubaru, began accepting tax payments by credit card through major Internet portal Yahoo! Japan on May 2. Officials studied the system for two years before launching the new payment system.
Miyazaki officials said using credit cards is convenient for taxpayers, online credit card payments can be made 24 hours a day and paying in installments is possible depending on the credit card.
The officials expect about 5 percent of car owners to use the new tax payment method to pay automobile tax.
Also in May, the city of Fujisawa, Kanagawa Prefecture, introduced the credit card service to pay minivehicle tax by credit card, after a successful trial in fiscal 2006.
Officials said 6.1 percent, or 2,200 of the 35,900 tax payments for fiscal 2006, were paid by credit card by the deadline and total tax payments made by the deadline rose 3.1 percentage points from 72.5 percent the previous fiscal year.
The officials said the outcome was probably due to the fact that taxpayers were aware that the system meant they did not have to pay in person plus they could earn points on their credit cards.
Tamaki and Fujisawa have decided to cover the card charges, and Miyazaki is charging taxpayers fixed handling charges.
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