Japan's Inheritance Tax Strengthening Controversy - Balancing Fiscal Consolidation Efforts with Concerns over Inheritance Rights

Amidst the Japanese government's pursuit of measures to strengthen inheritance tax in order to secure tax revenue, concerns about infringement on citizens' inheritance rights are being raised. While the government maintains the stance that it needs to increase the inheritance tax burden on the wealthy to achieve fiscal soundness, criticism that the tax increase is excessive is emerging.

The Japanese government has embarked on strengthening inheritance tax as a means to reduce the national debt, which amounts to 1 quadrillion yen. Particularly, given the severe aging issue stemming from the world's highest life expectancy, the government believes that securing tax revenue through inheritance tax hikes is unavoidable.

Since this year, the government has been intensifying integrated taxation of inheritance and gift taxes, including extending the period for calculating gift tax additions from 3 years to 7 years. Moreover, they are considering extending this period to a maximum of 15 years in the future. Through this, they aim to regulate lifetime gifts that the wealthy have been utilizing as a means to evade inheritance tax.

Furthermore, an increase in inheritance tax for siblings is anticipated. Under the current inheritance tax law, when parents are absent, siblings are granted a basic exemption equivalent to half of the total inherited amount. However, this is scheduled to be revised in a direction that reduces this exemption. The government's plan is to significantly lower the basic exemption, thereby increasing the inheritance tax burden.

However, this inheritance tax strengthening movement by the government is causing controversy regarding the infringement of inheritance rights. Although inheritance tax is a tax, it ultimately involves the transfer of property from parents to children. Therefore, imposing excessive inheritance tax can infringe on inheritance rights, critics argue.

Especially in the current reality where inheritance is becoming more difficult due to the increase in single-person and childless households, concerns are rising that strengthening inheritance tax further could violate citizens' property rights. The business community and some experts advocate that securing tax revenue through other taxation methods like income tax would be more rational.

Meanwhile, the issue of fairness in inheritance tax reform is also being raised. This is because there are analyses suggesting that if inheritance tax becomes too high, it could hinder the active transfer of inheritances. Ultimately, it is argued that the middle class who used to pay lower inheritance taxes might benefit, while the effect of increased taxation on the wealthy could be minimal.

Thus, in Japan, debates surrounding inheritance tax continue amidst the balancing act between securing tax revenue and protecting inheritance rights. The government maintains its position that strengthening inheritance tax is unavoidable for achieving fiscal soundness, but it seems necessary to achieve a national consensus during the process of determining the level of tax increase.