From January 2015, the government hopes to introduce a “common number” system under which each individual will be issued an electronic card that will be used for both taxation and social security purposes.
The card will contain information on such matters as the cardholder’s income, payments at medical institutions, pensions, social welfare benefits, savings transfers and property transactions. The government says the system will enable the government to keep a better tab on individuals’ incomes in its efforts to prevent tax evasion.
The system also is expected to result in a more equitable redistribution of income between the rich and the poor through taxation and social welfare measures.
Other merits of the system, as publicized by the government, include easy implementation of the negative income tax for low-income people, or a recompensation to such people with part of consumption tax revenues. The government says people will be able to receive, for example, various social welfare benefits and tax credits for medical expense with less red tape.
But the government must consider problems the planned system may create. Information in the card may be leaked to or obtained by third parties. Someone may pose as the cardholder and cause financial and other problems to that person. This type of crime has happened in the United States, northern European countries and South Korea, where similar systems are in force.
The government must make clear how it will prevent abuse of information confidentiality by public servants who control the system. It also must make sure that citizens can always check or correct the information in the cards and easily determine whether the information has been misused or leaked.
First and foremost, the system will equip the government sector with the means to know a considerable part of a citizen’s private life, further regimenting Japanese society.
Compared with ordinary salaried workers, wealthy people will likely have an advantage under the new system, as they have the know-how and means to get their income taxes reduced.
The government must make a point of publicizing all the potential demerits or weak points of the system. The system should not be adopted unless public consensus is obtained through informed public debate.
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