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Japan, a tourist favorite, has become the ultimate spot for many immigrants to lay down roots. Yet, fitting in poses challenges, with some depicting foreigners as chronic rule-breakers. The sudden warning from the ruling Liberal Democratic Party (LDP) adds fuel to this fire. Under a new proposal, unpaid taxes might become grounds for booting out Japan’s permanent residents.
A New Entry On Permanent Residency Rules
Under Prime Minister Kishida Fumio’s lead, the cabinet is weighing a new amendment to the Immigration Control and Refugee Recognition Act. The proposed change reshapes permanent residency criteria, adding tax compliance and paying one’s health insurance premiums as a make-or-break factor. In a nutshell: pay your dues on time, secure your status; fall short, risk revocation.
Article 22-4 of the Immigration Act is the legal guide for special status revocation, detailing situations where foreigners risk losing their unique standing. Conditions span from false residence declarations and illegal entry to document forgery and halting residency-motivating activities without valid reasons or notice, and failure to notify residence changes.
Unpaid taxes and overdue social insurance premiums might soon secure a spot on this list. The idea? Allegedly, to enhance the permanent residency attribution system.
Tax evasion: A familiar sight in Japan?
Even in a country known for its low crime rates like Japan, this scenario isn’t all that rare. Let’s talk numbers.
In 2020, the Ministry of Health, Labour and Welfare surveyed 12.384 million individuals under insurance as part of the National Pension Insured Persons study. Among them, 1.931 million (15.6%) had overdue payments, and 561,000 (4.5%) had deferred payments.
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Notably, this survey omitted certain groups, including foreigners. Ergo, Japan is no novice in tackling tax evasion, be it with or without foreign residents.
The Tax Delinquency overview for FY2022 revealed insights into the arrears situation across the population, with no specific group excluded. New arrears in 2022 amounted to ¥7,196 billion, marking a 4.4% decrease from 2021 and a substantial 40% drop from the 1992 peak at ¥18,903 billion. Resolved arrears in 2022 spiked by 2.1% from the prior year, showcasing effective strides in tackling tax obligations.
This upward trend hints at residents gaining ground on overdue payments, and the increase in immigrant count is not altering the course.
The current process for dealing with tax evasion
Now, how does Japan deal with tax evasion? It employs a systematic five-step approach: suspects get a reminder letter, followed by a 10-day payment window. If that falls through, a request for voluntary payment notice follows, leading to asset investigation, seizure, and, in severe cases, asset allocation.
The numbers speak for themselves, showing the success of this method over the years. Yet, the lingering question is – why not apply it to foreign residents too?
The reason behind PM Kishida’s contemplation of revoking permanent residency is somewhat unclear. Was it prompted by a surge in tax non-compliance among foreigners? We’re left guessing, as official data gave us no heads-up.
Adding a touch of irony, the government’s proffering this idea right after an LDP funds scandal where members were caught not reporting taxes on a whopping 676.54 million yen expenditure from party revenue. Let’s not forget past scandals like the 2004 pension premium issue involving politicians from LDP and DPJ. There are also historical fund problems like the Lockheed accident in 1976 and the Recruit incident in 1988.
Against this backdrop, doubts arise. Is this a strategic move to divert attention from political scandals ahead of looming elections?
Permanent residency: The golden ticket
Permanent residency is an exclusive status in Japan, not handed out randomly. As specified by articles 22 and 22-2 of the Immigration Act, to qualify, you need to meet specific criteria like residing in Japan for a decade or more (five years if married to a Japanese national), maintaining good conduct, having sufficient income to sustain a livelihood, and contributing to Japan’s interests.
It’s not a walk in the park. And there might be a couple of challenges along the way.
Since the 2000s, however, permanent residents in Japan have soared, reaching a peak of 880,000 in June 2023. The government is actively promoting this increase, implementing a new pathway in April 2023. This initiative allows “special highly skilled professionals” to secure permanent residency in just one year, provided they possess specific academic titles and maintain annual incomes exceeding a designated threshold. This approach aims to attract foreign talent and address the demographic shifts caused by an aging population and dwindling birth rates.
Japan In Dire Need of More Foreign Nationals
Why the incentives? Because, amidst a declining population, Japanese industries are grappling with 48 consecutive periods of employee shortages since August 2011.
The 2023 Labour and Economic Trends Survey spotlights the urgent demand for manpower in transportation, postal services, construction, and healthcare. Echoing this sentiment, PM Kishida emphasized the call for Japan to envision a society seamlessly coexisting with foreigners
This background frames recent government initiatives to attract foreign talents. Take, for instance, the 2019 Specified Skills Visa System, welcoming a remarkable eleven new expertise categories. Couple that with the proposed digital nomad visa and above mentioned revisions to permanent residency acquisition. Adding to the mix, the government aims to welcome 400,000 international students by 2033, hoping half will kickstart their careers in Japan.
All roads led to a record-breaking moment last year as Japan welcomed over 2 million foreign workers for the first time. With a 6.7% year-on-year increase, a remarkable jump from 2022’s 4.8%, Japan is making undeniable progress. Leading the way are Vietnamese nationals, closely followed by talents from China and the Philippines. Notably, almost 600,000 are skilled technical workers, playing pivotal roles in sectors struggling with labor shortages. Tokyo stands out as the epicenter, hosting over 600,000 foreign talents in a vibrant hub of diversity.
And this trend is here to stay. Population projections foresee foreigners surpassing 10% of the domestic scene in 50 years.
However, there’s widespread hesitancy among locals. In a 2020 NHK survey, 70% supported the idea of increasing foreign workers. But enthusiasm dropped to 57% when asked about having foreigners in their neighborhood. Notably, 31% voiced concerns about potential declines in public safety.
Time For a Different Approach?
Japan is racing against the clock, with Mitsubishi UFJ calculations predicting a future yearly decrease of 220,000 in its labor force. Faced with this dilemma, the key is encouraging more foreigners to stay — whether as permanent residents or through alternative avenues.
If all I’ve said above holds true, expulsion might not be the best call. Tax evasion is universally wrong — regardless of nationality. However, effective procedures for dealing with it could probably do the trick for foreigners as well. And as we move forward, there’ll be an increasing need for consultation systems actively aiding foreigners as they navigate through life in Japan.
Sources
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