Recently, my husband and I have been through a pretty stressful experience related to some elements of the bureaucracy in Japan. All countries have their red tape and rules, of course. The difference in Japan is that the rules are so vastly different for foreign folks compared to the average Japanese person and it can be confusing at best.
If you want to do everything right and get everything straight as a foreign person in Japan, you have to make a concerted effort to find everything out and even then you might fail to get it right. The tendency of most people in Japan due to communication differences is to simply tell you only what you ask to hear rather than enlighten you about an overall situation. If you fail to ask the right question, you may not learn what you need to know.
There are a few reasons for various problems that foreign folks have in dealing with the red tape here. One of the reasons is that most Japanese employees are of a different status than most foreign employees. That is, most are "company workers" and we're considered "temporary workers". The point of making us "temporary workers" is to stop companies from having to fork over the benefits to us that they pay Japanese employees like supplemented health care payments, pension benefits, etc. Since most foreign folks remain in Japan for a short time, I don't have too great a problem with this. Most of them don't really need those benefits or would likely lose any money invested in such systems should they be hooked into them, though I don't think the companies care at all about saving us money. They do it mainly to save themselves money.
The real problem arises because company employees get a wide variety of bureaucratic tasks completely taken out of their hands. For instance, most Japanese people don't file their own taxes or manage their payments. The company's accountant just takes care of the whole thing. When I ask Japanese people about filing their income taxes, most of them have no idea how to do it, when to do it, or what they're even paying. The average Japanese person can offer me no advice on such things. The average American, on the other hand, can tell you plenty about taxes and how they need to be handled and when they need to be paid because the responsibility is equally in every person's hands.
Such is not the case for the vast majority of foreign folks and the people at the companies we work for often do not tell us anything about what we should be doing. The best you can generally hope for is some vague notation with your salary statement that you may owe additional tax and are responsible for paying it, but with no guidance about what those taxes might be above and beyond the income tax you already have paid or how you should go about finding out what they are. Sending newcomers to a foreign country out into the wild blue yonder in search of random taxes to pay isn't really the best way to handle things in my opinion. The fact that the companies know full well what taxes need to be paid and could tell you what they are, where to go to handle them, and how to make sure you are sent the proper bills indicates that they are either too lazy or indifferent to offer guidance or that they don't want you to know about those taxes because the bite out of your paycheck (10%) may make you think twice about working for your current salary. My vote is on lazy and indifferent.
During my first few years in Japan while working at Nova, I was never told that I needed to file an income tax return. I don't even know to date if I could have filed and gotten some of my tax money back or if I owed money, though the latter is almost certainly not so. The issue simply did not exist for me because I was completely unaware of this need. My husband's school, which was a much better place to work, took care of the tax filing for him so I figured this is what all places of employment did. In retrospect, it may have been what Nova did for me, but I have no way of knowing 18 years on. Certainly the idea that I was failing to act properly never even occurred to me.
Foreign folks get criticized a lot for not following the rules, not paying their way, etc., but the truth is that there is no organized system in place to help us do so. You learn piecemeal, if you learn at all. There's absolutely no reason for this to be the case. We're all registered at our local government offices and they have our addresses. They could send us tax forms to remind us that we have to pay, but they don't send them to you until you first file of your own initiative. In other words, you have to first find out that it is necessary and do it of your own volition in order to receive a reminder. If you assume that the company handled it for you (as is so often the case for the majority of people), no one is going to tell you this is even necessary in your particular case so you blithely go about your business. Most foreign folks are not even aware that their cases are different from that of the Japanese when it comes to such things.
The part that aggravates me about this situation is that critics (mostly the "Uncle Tom" foreigners) will state that you can't expect to be treated differently simply because you're a foreigner. The thing is that the problems stem from the fact that you are treated differently already because you're a foreigner. You can't automatically place the vast majority of foreign folks in different working conditions than the norm (the norm being the company handles such things) and then expect them to figure out that they need to do something differently and then criticize them for not doing exactly what the Japanese do (which is nothing). In other words, you can't have it both ways. Either they are treated the same and expected to do the same or they are treated differently and offered guidance to assist them in their particular situation. The aggravating thing is that the solutions are relatively simple, but no one takes responsibility for implementing them. Nobody tells you how to be a good citizen, but they're all ready to get in line and condemn you when you make a mistake and fail to act like one.
Personally, I think the ambiguity is intentional. The government wants your money, but they also want to allow loopholes for certain groups of people. In Japan, they love nothing more than being wishy-washy. This may sound absurd, particularly in regards to taxes, but there is a level on which it makes sense. There are "temporary workers" who are Japanese as well as foreigners. The main difference is that there are very few company workers who are foreign. In fact, lately, the number of Japanese who are seen as temps is growing. These workers are cheaper for companies because they get no benefits and cost the companies less.
The ambiguity likely exists to allow the companies to continue to easily secure such workers because they are okay with working under less than optimal conditions (no security, no bonuses, no benefits) if they can keep more of their paychecks than company employees. It may sound absurd, but Japan is not a country that views contracts and rules of law as something to be adhered to strictly. They view such things as guidelines from which to consider each situation on a case by case basis. One of the reasons Western business and Japanese business often have problems working together is that the Japanese don't view contracts as something hard and fast, but Westerners do. If ambiguity and selective enforcement are seen as having an overall benefit to society, then they are left in place. This can be rather maddening for those of us who are accustomed to having rights and using the laws to let us know where we stand.
(As an aside: I will note that my views spring from the fact that there are some Japanese people who are "temporary workers" who willfully do not file their taxes even though they are aware that they should. I'm told that they don't do it because they are young and don't want to start paying into the pension system yet because they won't benefit from it for decades and that this allows them to avoid paying city and prefecture taxes. (For the record, most of us are taxed accurately or over-taxed on our income taxes so not filing means writing off a possible refund.) This is an entirely different topic, but I think their reluctance to pay into the pension fund is driven by the ridiculously low monthly payments and the fact that paying in more or longer has no impact on your benefits. In other words, they can spend 25 years paying into the system or 50 years paying in and they're still only going to get a flat payment of about 60,000 yen so they don't want to start paying any earlier than they have to.)
Fortunately for my husband and I, our issues appear to have sorted themselves out at this point in time. We won't know for sure for a few more weeks, but I'd say it's 99% sure that everything is okay and that nothing bad will come of the situation I've been stressing out over for the past three days. Being a nervous sort of person, I'm still losing sleep over that 1% though. And having a tendency to construct worst case scenarios, I'm still building mountains out of molehills. Chances are though, that it'll all be okay.
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4 comments:
You might know this story already, Orchid. I had a horrible time re: my city taxes.
When I first started working at Aeon we were all told about this and advised to sign up for the local tax with-holding scheme. This was a good idea because it meant that our managers kept back Y7500 per month; if the bill had come in when our contract ended, we wouldn't notice a huge amount coming out of our salaries.
When I left Takatsuki school I received a nice wadge of yen. I went to be an emergency teacher at the Kokura branch, which is classed as a different administrative area of Aeon. It was a completely new contract for me. There was a different teacher trainer and he negated to mention the tax with-holding scheme to me. As stupid as this now seems, I didn't pay a great deal of attention to my final Takatsuki payslip when I received it. I was catapulted into a new part of Japan and had to work hard that first week or so to get used to it, plus have training. But if this guy had mentioned the tax with-holding, asked if I'd been doing it and if I'd wanted to continue, I would've asked my new manager to take care of the money I'd received back from my previous manager. As it is I wired it all home and it went towards paying off a debt (which was one of the main reasons I came to Japan in the first place!).
A month later I did look at my payslip and noticed that the tax with-holding box was left blank. I asked my new manager about it, but her English and my Japanese were both limited. She went off saying she'd look into it. Work being as busy as it was, it probably slipped her mind. The next month's payslip came and I asked her to clarify things again, at which point we decided to call the American trainer. It turned out he hadn't say a thing about the tax with-holding to me during training - even though he two Aeon trainers at Kansai had, so surely all trainers should've known to mention this to foreign staff. By now I'd missed two months of setting aside money, and what's more I had to remind him again the next month, hence losing three months of them setting money aside for me. This may not sound a big deal, but when there is help like this it's useful. I was finding Japan extremely expensive and didn't want to be saddled with a huge bill when I left.
The trainer even advised that I might not have to pay up - I could skip the country if the bill hadn't come in!
For the record I didn't begrudge paying local taxes. I guess our equivalent here in the UK is council tax. Ours is one of the highest in the country, and we do not have the clean streets and services I had access to in Japan (although living in a suburb I'm sure I don't know the half of it).
In the UK we only sort our own tax if we're self-employed. Otherwise tax and National Insurance is deducted at source. We are, of course, responsible for paying our own rent and council tax. An Aeon paypacket consists of moneys left after tax and housing seeing as we live in company-leased apartments. I was happy with this as well as the tax-with-holding scheme. The only fly in the ointment was this dunderheed trainer who, although it wasn't his place to remind me to hang on to the returned local tax, didn't have a clue about offering me a scheme that's already standard Aeon procedure for foreign staff. And yes, I did have to pay it and it all came out of my final paypacket. But by now I was just relieved to be leaving!
At least Aeon sometimes tells you that you should do this. Most places don't even do that much for you. A lot of teachers don't know the taxes exist until the end of the first year (if at all). It's interesting that your school actively made it harder for you when you tried to do the right thing.
I honestly think a lot of Japanese people feel that it's not a big deal if we don't pay it because we're leaving soon anyway.
¥7500 a month sounds really low though for city taxes. Recently, I read that it is 10% these days (though mine was about 6% last year).
I can totally relate. But here is the problem- with the pension scheme of things.
When I work FT, the smaller schools don't even offer up anything, I pay it year end when I do my taxes, but a month ago the pension guy calls and says "oh, you have an option to pay 200000yen toward your missed payments for a year.. I was like missed? Don't thing so, you see for a year I only worked P.T., so I was under my husbands scheme, which means I am legally covered....but to call my home... that was borderline ... strange, I think it is essential to have a retirement fund in addition to the scheme here in Japan my father has most of his tied up in stocks which I think can be a little risky.
Many schools claim they don't bother because most of he workers are here for a year and leave but they fail to notice many live and Japan has become a home, so I really think it is ignorant on their part.
I completely agree with you, GirlJapan. I think that there should be two different ways of approaching how people pay into the pension system/resident's tax situation. If you are a short-term person, you shouldn't be paying unemployment insurance, pension, and your residence tax should be assessed at a different rate (as presumably the only city service you'll be using is trash collection).
I think that these offers are not made because the companies have to pay into the systems for employees and they don't want to make that investment for any more employees than they have to. In the end, it's not about what may work best for us, but what may work best for the companies.
It is my opinion that the only reason that pension system payment is becoming an issue now is that the way in which foreigners have been employed, as "temporary" employees, has been mainstreamed and now is the way many Japanese are employed as well. With the shrinking working population, the large number of retirees, and the large number of temporary workers, the system isn't getting enough money so the issue is being pushed and foreigners who have no intention of living here for 25 years are being swept into the system mainly to take their money and offer no benefit.
That being said, if I had known I would live here so long and had been given an option to pay in or not, I wouldn't choose to pay in given the tiny pension payment. Even in a very low interest (2%) CD in a bank in the U.S. (which is very secure), you can make the equivalent of 60,000 yen a month on savings of $300,000. Saving the money yourself has the benefit of you having access to it at any time, having compound interest help boost your savings, and allowing you to collect the money from any country. The Japanese pension system will only pay out if you're residing in Japan.
For the record, you'd need to save about $1,000 a month (or about 100,000 yen) to reach $300,000 in 25 years, though with compound interest, you'd likely get there sooner depending on how quickly you saved and at what interest rate you were saving. And most people pay into the pension system for longer than 25 years.
You can do so much better than the Japanese pension system. I don't know what people pay in on a monthly basis, but there's every chance you'll do better saving on your own, even if you avoid high risk stocks.
Your father's retirement is probably going to be secure if he isn't retiring in the next 5 years. The stock market sucks now, but it'll rebound through time. Everyone should be gradually moving their retirement account to more secure holdings if they expect to stop working in 10 years. Up until that point, they're probably okay to let it ride for the most part in the long term.
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