OBIC BUSINESS CONSULTANTS CO.,LTD. (OBC) and SAJ’s Born Digital Study Group jointly published a new policy centred on the digitalisation of individual income reporting and a survey report on the UK’s digital tax system. They outlined their aim of redesigning Japan’s year-end tax adjustment and tax return processes as a social system designed on a digital-first basis.
OBIC BUSINESS CONSULTANTS CO.,LTD. (OBC) and the Social Systems and Digitalisation Study Group of the SAJ Policy, Legal Affairs and Intellectual Property Committee, known as the Born Digital Study Group, published recommendations for redesigning individual income reporting as an integrated social system based on digital processes rather than paper-based annual processing, together with a survey report on the digitalisation of tax administration in the United Kingdom.
The recommendations call for redefining year-end tax adjustments as a “simplified version” of tax returns and simplifying them thoroughly by narrowing the eligible population and deductions. They also call for payroll payment reports to be digitised and submitted monthly in real time, with reporting across income tax, resident tax, social insurance and official statistics consolidated under a once-only principle, and for an individual income information platform centred on income data to be established.
The proposal also aims to enable individuals to check their status through the income information platform and, in the future, complete a tax return with a single click, while ensuring appropriate legal grounds and transparency for the use of the information.
The groups aim to reduce the filing and tax payment burden on sole proprietors and people with side businesses by promoting data integration and API use with digital platform operators and automating bookkeeping and filing processes. Based on the UK’s experience, they state that continued co-creation will determine the success or failure of reform and seek to apply that insight in Japan.