October 30, 2008
Six banks affiliated to Japan’s three major financial groups -Mizuho, Sumitomo-Mitsui, and Mitsubishi-UFJ- which are under fire for their reluctance to provide financial assistance to small- and medium-sized enterprises (SMEs) and for their forcible debt collection practices, have not paid the corporation tax for ten years.
Exposing this fact at a House of Representatives Financial Affairs Committee meeting held on October 29 to discuss a new finance bill, Japanese Communist Party Sasaki Kensho demanded that the government stop giving the major banks such favorable treatment in taxation.
The six banks in question have had the privilege to use tax money to rebuild themselves. Their net profits before taxes reached 1.7 trillion yen in FY 2007. Despite this, they have not been required to pay the tax thanks to tax breaks that allow them to use their surplus to make up for past losses.
Sasaki said: “While ordinary people have been forced to shoulder an extra-12.7 trillion yen in taxes since the Koizumi Cabinet, the government has not levied any tax on the major banks despite their record profits. At the same time, the banks have increased their reluctance to arrange new loans for smaller firms and intensified forcible debt collection practices against them.”
Sasaki said, “The government has given generous tax breaks to major banks at the cost of SMEs. It must fundamentally change its policy.”
Finance Minister Nakagawa Shoichi said that he hopes “to have the bill enacted as soon as possible so that funds may be made available to financial institutions that provide loans to SMEs.” However, he admitted that the bill contains a scheme to force the public to pay in the form of tax revenues if the banks incurred losses.
If capital injection is necessary for the stable management of financial institutions, Sasaki stressed, “The way is for the entire banking industry to ultimately take responsibility for the losses.”
He demanded that the government prevent major banks from refusing to lend money to SMEs, and not pump public funds into them because such a step will impose tax burdens on the public in the end.
Exposing this fact at a House of Representatives Financial Affairs Committee meeting held on October 29 to discuss a new finance bill, Japanese Communist Party Sasaki Kensho demanded that the government stop giving the major banks such favorable treatment in taxation.
The six banks in question have had the privilege to use tax money to rebuild themselves. Their net profits before taxes reached 1.7 trillion yen in FY 2007. Despite this, they have not been required to pay the tax thanks to tax breaks that allow them to use their surplus to make up for past losses.
Sasaki said: “While ordinary people have been forced to shoulder an extra-12.7 trillion yen in taxes since the Koizumi Cabinet, the government has not levied any tax on the major banks despite their record profits. At the same time, the banks have increased their reluctance to arrange new loans for smaller firms and intensified forcible debt collection practices against them.”
Sasaki said, “The government has given generous tax breaks to major banks at the cost of SMEs. It must fundamentally change its policy.”
Finance Minister Nakagawa Shoichi said that he hopes “to have the bill enacted as soon as possible so that funds may be made available to financial institutions that provide loans to SMEs.” However, he admitted that the bill contains a scheme to force the public to pay in the form of tax revenues if the banks incurred losses.
If capital injection is necessary for the stable management of financial institutions, Sasaki stressed, “The way is for the entire banking industry to ultimately take responsibility for the losses.”
He demanded that the government prevent major banks from refusing to lend money to SMEs, and not pump public funds into them because such a step will impose tax burdens on the public in the end.
