Advocacy campaigns jaco
- 1. Experiences from Japan Charity Law and the enabling legislation Yoshiharu Shiraishi (JACO) Peer Learning Event, London 2th July 2012
- 2. 2 Main Issues 1. Recent changes of CSO legal system in Japan 2. The issues on CSO legal environment 3. Advocacy campaigns initiated by JACO 4. Major advocacy campaigns and its achievement <Legislation> 5. Major advocacy campaigns and its achievement <Taxation> 6. Other processes of JACO’s advocacy campaigns
- 3. 1. Recent changes in Japan regarding CSO legal system
- 4. 4 Japanese CSOs Basic Institutional Structure General Non-profit Public Interest Corp. Non profit Labour’s Unions 5,293 Corporation 22,141 (Civil Code Org. +22,783) Since 2008 Since 1896 Small business Specified Non-profit Approved cooperative Corporation 44,291 SNPC 232 Since 1998 Since 2002 Public Charitable Trust Since 1923 Consumers‘ Private School Corp. 7,884(since 1949) Social Welfare Corp. 18,537(since1951) cooperative 182,601(since1951) Religious Corp. etc. The Relief and Rehabilitation Corp. 163(since 1995) Management Unions of Condominium Medical Services Corporation 46,510 Since 1950 F Mutual benefit Public Benefit Source: Ministry of Finance (website), National Tax Agency (2009)
- 5. 5 PIC legislation reform Registration process of PIC 1896-2007 2008-present Public Interest Corporation Public Interest Corporation (22,783) (5,206) Permitted by Authorized by Government Authorities PIC Commission 2001-2007 General Non-profit Intermediate Corporation Corporation (22,141) Registered at Registry Office Registered at Registry Office
- 6. 6 SNPC legislation reform Registration process of SNPC 1998-2002 2002-present Approved Specified Specified Non-profit Non-profit Corporation Corporation (260) Certified by Prefectural Gov. Authorized by 1) & Registered at Registry Office Prefectural Government Specified Non-profit Corporation (45,280) 1) Up until 2012 March, qualified by Certified by Prefectural Gov. National Tax Agency & Registered at Registry Office
- 7. 7 Next stage At present Next step? Public Interest Corporation Authorized by PIC Commission Charitable organizations General Non-profit Corp. Authorized by Registered at Registry Office Charity Commission Approved SNPC Non-profit Organizations Authorized by Prefectural Gov. Certified by Prefectural Gov. Specified Nonprofit Corp. or Registered at Registry Office Certified by Prefectural Gov. & Registered at Registry Office
- 8. 8 Regulation for PIC & Approved SNPC - 1 Public Interest Corporation Approved SNPC Governing law Act on Authorization of Public Interest Act on Promotion of Specified Non-profit Incorporated Associations and Public Activities Interest Incorporated Foundations Authority Public Interest Corporation Commission Prefectural Governor Type Association & Foundation Association Necessity of Indefinite duration Once every 5 years extending status Activities 22 indicated1) 20 indicated1) Political & Prohibited Prohibited Religious activities Profit making Permitted to some extent Permitted to some extent activities Residuary assets Cy-pres doctrine (It must be used for the Cy-pres doctrine (It must be used for the distribution charitable activities) charitable activities) 1) Charitable activities and specified non-profit activities to be registered are shown on Page 8 and 10
- 9. 9 Regulation for PIC & Approved SNPC - 2 Public Interest Corporation Approved SNPC The least (Association) 10 or more number of 2 or more members Qualification of (Association) (Association) members Unfair qualification constraint Unfair qualification constraint Amount of (Foundation) Not applicable endowment 3 million yen or more Decision-making Association ： General Meeting General Meeting body Foundation: Board of Councilors Association ： Board of trustees Board of trustees Executive body Foundation: Board of trustees Supervising Auditors (more than1) Auditors (more than1) body Disclosure Required Required
- 10. 10 Taxation for PIC & Approved SNPC - 1 Public Interest Corporation Approved SNPC Corporation No tax on earning from business related No tax but impose a tax on 34 types of income tax to charitable activities. profit earning business, related or not related to charitable activities. Withholding No tax Tax imposition income tax of interest etc. Deemed 50% of gross income (51% or more, 50% of gross income or 2million yen, Contributions depends on the condition) chose either larger one of the two. would be capped at… Income/ Not levied deduction levied dividends revenue Tax Donation of Deductible from inheritance property Deductible from inheritance property bequest
- 11. 11 Taxation for PIC & Approved SNPC - 2 Public Interest Corporation Approved SNPC Donation Tax Donors can choose either tax deduction, Donors can choose either tax deduction, ie Benefit for ie “deduction from income”, or tax “deduction from income”, or tax credit, ie donors (private credit, ie “ deduction from income tax”. “ deduction from income tax”. If donors person) If donors choose tax deduction, they can choose tax deduction, they can deduct deduct their taxable income up to 40% of their taxable income up to 40% of total total income. If they choose tax credit, income. If they choose tax credit, they can they can save their payable tax up to save their payable tax up to 25% of 25% of income tax and up to 10% of income tax and up to 10% of prefectural prefectural and municipal tax. and municipal tax. Donation Tax Be given preferential taxation treatment Be given preferential taxation treatment Benefit for to some extent donors (Corporation) The size of expenditure and employees salary Expenditure (billion yen ） Employees Salary (billion yen ） Public interest Corp. 20,338 3,679 Specified nonprofit 738 112
- 12. 2. The issues on CSO legal environment
- 13. 13 The issues on CSO legal environment - 1 The most questionable of legal system at present is as follows; In general 1. CSO legal system is quite confused due to the existence of too many different types of legal entities. Related to PIC legal system 2. Application procedures for initial registration, annual reporting form and etc. are too much complicated and burdensome. 3. Expenditure Ratio between program expenditure and general administration costs on public interest activities is restricted. 4. Regulation on idle assets is not flexible.
- 14. 14 The issues on CSO legal environment - 2 Related to GNC legal system 5. The operation of GNC covers non-profit activities, mutual benefit activities and other activities. 6. There is no limitation to the purposes of activities or their specifics, except non-profit principle. 7. GNC law has been too much affected by technical aspects of the new Companies Law. Related to legal system of SNPC approved & SNPC not approved 8. Authorization requirement of Approved SNPC is restricted due to the taxation breaks applicable to them. 9. Taxation system of Approved SNPC is very similar to the one for PIC, but legal basis of governance is not necessarily strong. 10.The number of SNPC counts more than 45,000 but most of them are grass root-type organizations.
- 15. 3. Advocacy campaigns initiated by JACO
- 16. 16 Advocacy related bodies in JACO Legislative Committee CSO legal system study panels Taxation Committee Department of Research Research projects Compliance Committee Symposia / seminars Accountancy Committee Questionnaire/public comments Working group Executive office JACO General public PIC Commission Media Government agencies
- 17. 17 Advocacy on PIC legal system National Government Public Interest Corporation Commission CSO legal system study panels Executive board members 7 members Executive Office Executive office Advocacy team Legislative Committee Department of Research 15 members Research projects Executive office Symposia / seminars Questionnaire/public comments JACO
- 18. 18 Advocacy on PIC taxation system National Government Public Interest Corporation Commission Taxation Committee Executive board members 15 members Executive Office Executive office Advocacy team Research project JACO
- 19. 4. Major advocacy campaigns initiated by JACO <Legislation>
- 20. 20 Advocacy on regulatory body (2004) JACO’s advocacy on regulatory body initiated in 2004 towards PIC legal reform. 1. Regulator: independent body 2. Key functions: clearly identified public benefit, monitoring and compliance, supporting charities. 3. Board members: academics and specialists from the private sector 4.Executive office: recruit lawyer, accountant, practitioner, etc. in executive office 5. Council organization: setting up council organizations in each prefecture
- 21. 21 Advocacy on regulatory body (2004) 6. element for judgment: purpose, activity, governance, but not performance results. 7. charitable activities: suggested lists of charitable activities. 8. etc… October 5, 2010 In fact, Japanese version of Charity Commission has been established in 2008 JACO held mass media round-table conference
- 22. 22 Mr. Ohta’s testimony at the Diet (2006) On April 17, 2006, Mr. Ohta (President & CEO of JACO) testified his opinion on the coming charity law reform at the special legislation committee of the House of Commons (which was deliberating about the draft of new charity laws) on behalf of the charitable sector of Japan. April 17, 2006 In fact, his opinion was supported by the majority of the committee members and was reflected into the new charity law. Mr. Ohta testified at the diet of Japan
- 23. 23 Advocacy on PICC’s role & function (2010) 1. Improve procedures more speedy and flexible. 2. Disclosing regulatory cases. 3. Reforming authorization law related to financial criteria, authorization process and guideline. 4. etc… September 27, 2011 In fact, the Commission started to improve the process of authorization. Also the PICC started to provide consultation Democratic Party conducted hearings with Mr. Ohta and other experts. service for applicants with JACO.
- 24. 24 Changes in organization number
- 25. 5. Major advocacy campaigns initiated by JACO <Taxation>
- 26. 26 Advocacy on taxation system (2010-2011) 1. Review of tax deduction for capital gains on the assets donated to PICs. 2. Review of tax deduction for inheritance property donated to PICs. 3. Review of tax deduction for donors who provided PICs flow founds. 4. Tax deduction by introducing Planned Giving Trust. 5. Special tax relief related to charitable contributions for the Great East Japan Earthquake & Tsunami
- 27. 27 Advocacy on taxation system (2010-2011) 6. Introduction of new selective donation tax benefit (deduction from income or deduction from income tax) for individual donors. 7. Requested for repealing the public support test. 8. etc… In fact, items no. 4, 5 and 6 were materialized in the new taxation framework in 2011.
- 28. 6. Other processes of JACO’s advocacy campaigns
- 29. 29 Relationship with policy makers National Government (Reflecting CSO legislation and taxation framework) General Meeting New Public Commons Roundtable 19 members including Mr. Ohta 11 members including Mr. Ohta (Making high level consensus) (Making high level consensus) The expert panel on public service Steering Committee agreements between government and CSO 6 members 10 members (Support meetings and working groups) Working group on disclosure and facility to offer information 14 members Working groups Working group on earthquake support system Multi-stakeholder Forum on Social 6 members Responsibility for a Sustainable Future New Public Commons Roundtable
- 30. 30 Other relationship with policy makers National Government (Reflecting CSO legislation and taxation framework) Congressional representative JACO Advocacy Team
- 31. Thank you!
Editor's Notes
- #17: JACO represent the common concerns and a shared voice of the charitable sector against the government agencies, the media, and the general public. In this relation, JACO runs four standing committees “ Legislative Committee”, “Taxation Committee”, “Compliance Committee” and “Accountancy Committee”. JACO also organize the public hearings, seminars and symposia all over the regional areas in Japan, responding to their responsibilities of the national umbrella body in the field.
- #21: A council of advisors has been set by national government in 2002. An administrative office, tax authorities or an independent body are the three candidates for the body to make such decisions. The plan calls for the establishment of a legal framework and third-party body to be set up to judge whether a corporation is engaged in public interest services.
- #22: A council of advisors has been set by national government in 2002. An administrative office, tax authorities or an independent body are the three candidates for the body to make such decisions. The plan calls for the establishment of a legal framework and third-party body to be set up to judge whether a corporation is engaged in public interest services.