Japan Press Weekly

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2013 March 13 - 19 [NUCLEAR CRISIS]

Opposition increases against imposing tax on nuclear damage compensation

Public criticism has arisen against the government’s plan to impose a tax on compensation paid for damage caused by the accident at the Fukushima Daiichi nuclear power plant.

The National Tax Agency intends to levy income taxes on compensation paid by Tokyo Electric Power Co., the operator of the crippled plant, to business owners and employed workers to cover the loss of their income caused by the nuclear accident.

An increasing number of people in Fukushima are raising voices of protest against the government for automatically imposing the Income Tax Law on victims, many of whom have lost the very basis for their livelihoods because of the nuclear disaster.

A signature campaign opposing the tax, initiated by a group of smaller business owners in Fukushima, has been supported by nearly 80 local organizations in the prefecture, including a medical association, a contractors’ association, and a tourism co-operative.

“Compensation payments are insufficient for farmers to relocate and restart their businesses. It will be totally impossible for them to do so if 20 to 30% of the money they received is taken back in taxes,” said a staff member of Fukushima’s agricultural co-operative.

Sato Matsunori, secretary general of the Fukushima prefectural branch of the National Federation of Merchant and Industrialist Organization (Zenshoren), stated that the income tax could be as high as 40.4% of the compensation received.

Sato pointed out that the amount of reparations paid is not enough as TEPCO only makes up the difference in victims’ incomes between before and after the nuclear accident. The loss is much greater for local business owners who have lost their regular customers and their employees since the nuclear disaster destroyed their communities.

Although the tax agency claims that the compensation is taxable because they are exchanged between private entities, the government has provided 3 trillion yen in tax money to TEPCO, Sato criticized.

Fukushima prefectural assembly members of the Japanese Communist Party have called on the prefectural government to demand that the national government cancel the taxation plan.

In the Diet, JCP House of Councilors member Daimon Mikishi has shown that reparations paid to Minamata disease sufferers and farmers affected by the outbreak of foot-and-mouth disease were excluded from having to pay taxes on compenstion, urging the government to take the same measure for nuclear disaster victims.