In his growth strategy, Prime-minister Shinzo Abe wants to take Japan into the Top-3 in the World Bank’s Business environment ranking by 2020, but in terms of taxation infrastructure he still has a long way to go, reports Nikkei Online on August 1^st.

In the World Bank’s annual report on the business environment in 189 countries, Japan ranks 29^th overall and 19^th among OECD-member states,  but in terms of tax infrastructure the country ranks 122, lower even than China and just above Mozambique.

Nikkei looks in the reasons for this low ranking and finds that rather than the height of corporate taxation, the amount of administrative work needed to complete tax filings etc. is the major problem. In 2013, it took 330 hours per year in Japan from preparing documents to actual payment of taxes, while this would take half the time for the OECD average.  

Accounting standards, corporate taxation and compliance laws all add to the complexity of the system in Japan, making it more and more difficult to meet the deadlines and adding to costs of business in Japan, complains the American Chamber of Commerce in Japan (ACCJ). Domestic companies complain as well about the administrative burden, pointing out that filling taxes in countries such as the Netherlands and the UK is much easier.  Even China has already moved ahead with actively promoting online procedures for filing tax statements.

Nikkei concludes that a third place in the Global Business Environment Ranking might prove to be an illusion if the taxation infrastructure is not improved.

Source: 税インフラ、世界122位の理由は？ Nikkei Web edition August 1^st, 2015.