+--------------------+---------+---------+---------+---------+
| | 1894-5. | 1898-9. | 1903-4. | 1908-9. |
| +---------+---------+---------+---------+
| |millions |millions |millions |millions |
| |of _yen_.|of _yen_.|of _yen_.|of _yen_.|
+--------------------+---------+---------+---------+---------+
| Taxes | 70.50 | 96.20 | 146.10 | 299.61 |
| Receipts from | | | | |
| stamps and Public| | | | |
| Undertakings | 14.75 | 33.00 | 96.87 | 164.66 |
| Various Receipts | 4.58 | 3.67 | 8.15 | 11.48 |
+--------------------+---------+---------+---------+---------+
It appears from the above that during 15 years the weight of taxation
increased fourfold. But a correction has to be applied, first, on
account of the tax on alcoholic liquors and, secondly, on account of
customs dues, neither of which can properly be called general imposts.
The former grew from 16 millions in 1894-1895 to 72 millions in
1908-1909, and the latter from 5¼ millions to 41½ millions. If these
increases be deducted, it is found that taxes, properly so called,
grew from 70.5 millions in 1894-1895 to 207.86 millions in 1908-1909,
an increase of somewhat less than three-fold. Otherwise stated, the
burden per unit of population in 1894-1895 was 3s. 6d., whereas in
1908-1909 it was 8s. 4d. To understand the principle of Japanese
taxation and the manner in which the above development took place, it
is necessary to glance briefly at the chief taxes separately.
Land Tax.
The land tax is the principal source of revenue. It was originally
fixed at 3% of the assessed value of the land, but in 1877 this ratio
was reduced to 2½%, on which basis the tax yielded from 37 to 38
million _yen_ annually. After the war with China (1894-1895) the
government proposed to increase this impost in order to obtain funds
for an extensive programme of useful public works and expanded
armaments (known subsequently as the "first _post bellum_ programme").
By that time the market value of agricultural land had largely
appreciated owing to improved communications, and urban land commanded
greatly enhanced prices. But the lower house of the diet, considering
itself guardian of the farmers' interests, refused to endorse any
increase of the tax. Not until 1889 could this resistance be overcome,
and then only on condition that the change should not be operative for
more than 5 years. The amended rates were 3.3% on rural lands and 5%
on urban building sites. Thus altered, the tax produced 46,000,000
_yen_, but at the end of the five-year period it would have reverted
to its old figure, had not war with Russia broken out. An increase was
then made so that the impost varied from 3% to 17½% according to the
class of land, and under this new system the tax yielded 85 millions.
Thus the exigencies of two wars had augmented it from 38 millions in
1889 to 85 millions in 1907.
Income Tax.
The income tax was introduced in 1887. It was on a graduated scale,
varying from 1% on incomes of not less than 300 _yen_, to 3% on
incomes of 30,000 _yen_ and upwards. At these rates the tax yielded an
insignificant revenue of about 2,000,000 _yen_. In 1899, a revision
was effected for the purposes of the first _post bellum_ programme.
This revision increased the number of classes from five to ten,
incomes of 300 _yen_ standing at the bottom and incomes of 100,000
_yen_ or upwards at the top, the minimum and maximum rates being 1%
and 5½%. The tax now produced approximately 8,000,000 _yen_. Finally
in 1904, when war broke out with Russia, these rates were again
revised, the minimum now becoming 2%, and the maximum 8.2%. Thus
revised, the tax yields a revenue of 27,000,000 _yen_.
Business Tax.
The business tax was instituted in 1896, after the war with China, and
the rates have remained unchanged. For the purposes of the tax all
kinds of business are divided into nine classes, and the tax is levied
on the amounts of sales (wholesale and retail), on rental value of
buildings, on number of employees and on amount of capital. The yield
from the tax grows steadily. It was only 4,500,000 _yen_ in 1897, but
it figured at 22,000,000 _yen_ in the budget for 1908-1909.
Tax on Alcoholic Liquors.
The above three imposts constitute the only direct taxes in Japan.
Among indirect taxes the most important is that upon alcoholic
liquors. It was inaugurated in 1871; doubled, roughly speaking, in
1878; still further increased thenceforth at intervals of about 3
years, until it is now approximately twenty times as heavy as it was
originally. The liquor taxed is mainly sake; the rate is about 50
_sen_ (one shilling) per gallon, and the annual yield is 72,000,000
_yen_.
Customs Duties.
In 1859, when Japan re-opened her ports to foreign commerce, the
customs dues were fixed on a basis of 10% _ad valorem_, but this was
almost immediately changed to a nominal 5% and a real 3%. The customs
then yielded a very petty return--not more than three or four million
_yen_--and the Japanese government had no discretionary power to alter
the rates. Strenuous efforts to change this system were at length
successful, and, in 1899, the tariff was divided into two sections,
conventional and statutory; the rates in the former being governed by
a treaty valid for 12 years; those in the latter being fixed at
Japan's will. Things remained thus until the war with Russia
compelled a revision of the statutory tariff. Under this system the
ratio of the duties to the value of the dutiable goods was about
15.65%. The customs yield a revenue of about 42,000,000 _yen_.
Other Taxes.
In addition to the above there are eleven taxes, some in existence
before the war of 1904-5, and some created for the purpose of carrying
on the war or to meet the expenses of a _post bellum_ programme.