Wives of small business owners struggle to get their wages recognized as necessary expenses

Japan Press Weekly

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Wives of small business owners struggle to get their wages recognized as necessary expenses

Wives of small business owners have pushed local assemblies to adopt a resolution calling for revision of a tax law that does not recognize their wages as necessary business expenses. As of September 11, 25 local assemblies in Hokkaido Prefecture have adopted such a resolution.

Since Article 56 of the Income Tax Law does not regard wages paid to business owner's family members as necessary expenses, they face unfair treatment in receiving benefits in social security programs.

In cooperation with the Japanese Communist Party, women members of the Hokkaido Prefectural Federation of Merchant and Industrialist Organizations have made representations to 180 local assemblies in the prefecture and conducted a signature campaign to get Article 56 revised. They are owners of flower shops, beauty parlors, kimono shops, bars, and other small businesses.

Sawada Eriko (not her real name) runs an air-conditioning construction business with her husband. Her life has greatly changed since they started the business six years ago. She had to learn how to keep books, calculate taxes, and apply for compensation for job related accidents. Working from the morning, she has to drive her husband to work sites. When she gets home, cooking, cleaning, and all the other household tasks are waiting for her.

Sawada realized the need to abolish Article 56 of the Income Tax Law when she attended a study meeting in August last year organized by the organization mentioned above.

With other participants, she calculated the annual wage she should be paid based on her working hours and was surprised to know that the amount is more than 2.4 million yen. Yet only 860,000 yen is deducted from the total tax.

"I realized the contradiction of the taxation system. Although we have many hardships we cannot express, our 'wage' is too low." Since then, she has asked other small business owners to sign the petition and has taken part in street campaigns.

Aoyagi Tomiko has owned a camera store with her husband for 30 years in Asahikawa City. "Family employees' wages are categorized as wages in other countries. The problem in Japan is that we are not recognized as workers," she said.

- Akahata, September 14, 2009