The tax system and the law on nonprofit organizations have been recently revised to help NPOs in tax matters. These revisions are expected to lead NPOs to expand their activities not only in usual fields such as education, culture, sports, social welfare and community building but also in the efforts to help the areas hit by the March 11 quake, tsunami and the Fukushima nuclear crisis.
There are some 43,000 officially recognized NPOs in Japan. But as of July 1, only 223 of them were eligible for tax privileges designed to lessen the tax burden of those who donate money to them. A survey shows that some 70 percent of the officially recognized NPOs face financial difficulties.
The revision of the tax system will greatly increase the incentive for people to make donations to NPOs. In the past, the donated amount was deducted from a donor's taxable income. But the revision has introduced a tax credit exemption system.