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2009年1月 3日 (土)



--The Asahi Shimbun, Dec. 31(IHT/Asahi: January 3,2009)

EDITORIAL: Nonprofit activities


Nippon Pro Baseball, the NHK Symphony Orchestra, Amnesty International Japan and the Japan Parking Facilities Promotion Organization have one thing in common: They are all koeki hojin or public interest corporations overseen by government authorities.


The basic legal framework for the operation of koeki hojin entities, including shadan hojin (incorporated associations) and zaidan hojin (incorporated foundations), was reformed in December for the first time in about 110 years.


Also in 2008, the NPO Law (law to promote specific nonprofit activities) turned 10 years old. Although the two systems involving private-sector public interest activities have reached milestones, there is still much room for improvement.


This past spring, a corporation under the jurisdiction of the Ministry of Land, Transport, Infrastructure and Tourism was found to have squandered its road-related budget on wasteful projects, such as building little-needed parking lots. However, most of the nation's 25,000 koeki hojin entities are doing fine work in the fields of culture, sports, international exchanges and others.


Under the former system, which had continued from the Meiji Era (1868-1912), public interest corporations could not be established unless they were approved by the central or prefectural governments. The authorities also had jurisdiction over the entities after their establishment.


This system stood in the way of cross-ministerial activities, and even turned some corporations into "depositories" of government subsidies or destinations for retired bureaucrats.


The 2000 bribery scandal involving mutual aid society KSD, an incorporated entity, prompted the latest reforms that aim to eliminate political-bureaucratic collusion.


The reformed system does away with the need to obtain government approval to start a public interest corporation. As a rule, all one needs to do is register the incorporation.


If a planned new third-party committee recognizes the public service nature of the intended activities, the corporation will be eligible for generous tax breaks, such as tax exemptions on donations received.


The architects of the reformed system boast that this will eliminate bureaucratic red tape and bring greater freedom to public interest activities. However, the system is being given the thumbs down by the corporations.


They argue that the conditions are too strict and that registration requires a huge amount of paperwork. While they agree that entities of dubious nature should obviously not be approved, they say the system could result in proverbial cases of the cure being worse than the disease.


Meanwhile, the NPO Law was initiated by Diet members with support from citizens groups. Under this law, as many as 36,000 NPOs have been established over the last decade. But many are now struggling financially, and some dubious ones have emerged.


The establishment of NPOs is subject to approval from the Cabinet Office and other authorities. If they meet National Tax Agency requirements, they become "designated NPOs" eligible for tax breaks, such as tax-free donations.


Although the pertinent legislative provisions are revised every year, the hurdle is still high for designation as an NPO eligible for favorable treatment. Only about 90 have received that status so far.


The government insists that public interest corporations and NPOs alike must meet strict standards to qualify for tax breaks. While this argument is understandable, setting too high a hurdle would defeat the purpose of the law and will not help nurture a culture that encourages citizens to donate to public interest activities.


Both the reformed system and the NPO Law place too heavy a burden on public service corporations.


Private nonprofit activities are growing in importance. To support and encourage such activities, further reviews of the system are urgently needed, including easing the conditions under which those corporations will be able to receive tax-free donations.



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