Payment Related

Will you be able to pay taxes with smartphone payments? Why the government is digitizing

From January 2022, the government will be able to pay national taxes such as income tax and gift tax by smartphone payment (* 1).

Just like buying rice balls at a convenience store on your smartphone, you will be able to pay national taxes just by operating your smartphone. The aim is to ensure tax payments by making payment methods convenient, but in addition to that, it also has the purpose of promoting the digitization of government.

In this article, after explaining smartphone tax payment in detail, we will consider what kind of society will be if the digitalization of government progresses.


Overview of smartphone tax payment by the government

The target persons for smartphone tax payment introduced by the government are sole proprietors and office workers who have side businesses. Such people must file a final tax return every February to March to finalize the amount of income tax and special reconstruction income tax and pay the tax.

For sole proprietors, etc., handled on a dedicated site

The government will create a site for smartphone tax payment. Taxpayers access the site from their smartphones and enter the type of tax and the amount of tax. Tax payment uses the smartphone payment mechanism.

All you can do is pay taxes and there are no plans to change the way you file your tax returns.

Nevertheless, taxpayers no longer have to visit the counter to pay taxes, which has the advantage of not having to go out and the benefits of non-contact.

Is the upper limit of one payment 300,000 yen?

In addition to income tax, smartphone tax payment will also cover gift tax. However, the upper limit of the amount that can be paid by smartphone tax payment is 300,000 yen.

This is because the amount that can be settled on a smartphone is limited to about 10,000 to 500,000 yen each time. The maximum payment amount for smartphone payments varies depending on the company that provides the service.

Cashless payment of national taxes is already in progress

Smartphone payments are not the first cashless payment of national taxes. You can already pay national tax without touching cash by the following four methods (* 2).

Direct payment

Direct payment is a tax payment method that can be used by people using e-Tax. e-Tax is a tax-related procedure method using the Internet. If you use direct payment, you can pay national tax by transfer from your savings account just by operating it on your smartphone or computer.

Transfer tax payment

Transfer tax payment is a mechanism for automatically deducting tax from the taxpayer’s deposit and savings account.

It is exactly the same as the automatic withdrawal of utility bills. Automatic withdrawal is a payment method that has been used for many years, but it is now more cashless.

Internet banking

National tax payments are already available at banks’ internet banking services. Internet banking is a service that allows you to process financial procedures at bank branches and ATMs on the Internet.

Credit card payment

You can also use a credit card to pay national taxes. However, to use this, taxpayers need to register from the “national tax credit card payment site”.


Local governments have already paid taxes on smartphones

Smartphone tax payment by the government is not a very advanced initiative, and local governments are already making it possible to pay local taxes by smartphone payment.

Here, we will introduce examples from Tokyo and Yokohama (Kanagawa Prefecture).

Tokyo smartphone tax payment

For smartphone tax payment in Tokyo, use the smartphone payment app to read the barcode printed on the tax payment slip and pay by smartphone payment (* 3). The taxes that can be paid on smartphones are as follows.

  • Automobile tax type discount
  • Property tax and city planning tax on land and houses
  • Property tax on depreciable assets
  • Real estate acquisition tax
  • Personal business tax
  • Corporate metropolitan tax
  • Corporate business tax, etc.

Smartphone tax payment can be used for taxes for which the amount of one payment slip is 300,000 yen or less. There are two types of smartphone payments that can be used: PayPay and LINE Pay.

However, people who pay tax by direct debit (automatic deduction) will not receive the payment slip, so they cannot pay tax on their smartphones. You will have to stop the direct debit and switch to payment by payment slip before paying tax on your smartphone.


Yokohama city smartphone tax payment

From April 2020, Yokohama City has made it possible to pay city tax by smartphone payment and credit card (* 4, 5). The applicable taxes are as follows:

  • City prefectural tax for ordinary collection
  • Property tax on land and houses
  • Property tax on depreciable assets
  • Light vehicle tax classification

In the case of Yokohama City, in addition to PayPay and LINE Pay, there are also PayB as smartphone payments that can be used. The maximum amount of tax payment is 300,000 yen or less per payment slip, which is the same as in Tokyo. Also, the method of reading the barcode on the payment slip with the smartphone payment application is the same as in Tokyo.


What is the good future brought about by the digitization of government?

The reason why the government introduces smartphone tax payment even if it “follows” the local government is that the digitization of the administration has become an important policy. The government is trying to digitize the administration until it enacts a law called the Digital Procedure Act.

What good things does digitized administration bring to people’s lives?

What is the Digital Procedure Act?

The Digital Procedure Act came into effect in December 2019, and its purpose is to use digital technology to improve the convenience of administrative procedures and to simplify and streamline administrative operations.

The Digital Procedure Act stipulates the following three basic principles in order to improve administrative efficiency (* 6).

●Digital First

Administrative procedures are completed digitally

●Once Only

Information once submitted to the government agency will not have to be submitted again

●Connected one-stop

Complete multiple procedures in one stop, including private services


Expectations for Once Only and Connected

All three basic principles make people’s lives convenient. Among them, once-only and connected one-stop are likely to be effective in relieving the “procedural stress” that is overflowing in the world.

When you move to a different city, you have to change your address to various systems, institutions, businesses, etc. such as resident’s card, driver’s license, utilities, children’s school, bank, credit card company, etc. Hmm. There are even jokes that these procedures will allow you to memorize your new address.

If the information of the new address submitted to one government agency by Once Only is transmitted to other government agencies, it is not necessary to write the new address each time. In addition, if Connected One-Stop allows the information on the transfer notification of the residence certificate to be transmitted to banks and utilities, the number of times to write a new address will also decrease.

Fast, accurate and reliable

The delay in digitizing administrative procedures in Japan was revealed by the spread of the new coronavirus infection that occurred in 2020 (* 7).

The government has issued various subsidies for the economic measures of Corona, but due to the large number of analog procedures, the examination is delayed and the cash payment is delayed, and a large amount of clerical work is burdened by local government officials. The system was loose and caused an incident of illegal receipt.

And in 2007, long before the Corona disaster, the so-called “disappearing pension record problem” occurred (* 8). It turned out that there are more than 50 million pension records of unknown owners, which has become a major social problem.

The cause was that when combining multiple public pension system numbers into the basic pension number, the old number remained, or when the paper ledger record was transferred to the computer, it was entered incorrectly.

This can also be seen as one of the harmful effects of the delay in digitization of the government. Digitization of government should ensure fast, accurate and every procedure. You can expect very much.


Summary-It is strange that it is not digitized

If you work for a company that is becoming more and more IT-oriented, you may be surprised when you go through administrative procedures, “Is this also handwritten?”

People who make heavy use of smartphone payments and rarely carry cash may feel “prehistoric” when they come across a scene where they can only shop with cash. Smartphone tax payments may be more of a relief, such as “is it finally digitized?” Than the excitement of launching a new service.

Digitalization of government has the big problem of security and care for people who cannot respond digitally, but there is no reason not to proceed.