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EDUCATION

Gov’t mulling gift tax exemption on donations for poor children from philanthropists

  • August 27, 2016
  • , Asahi , p. 3
  • JMH Translation

The government has been considering providing a gift tax exemption for donations to impoverished children so they can receive education funds from philanthropists. It envisages giving the tax credit for donations of up to 15 million yen. The Cabinet Office and the Ministry of Health, Labor and Welfare will incorporate this into revisions to the taxation system to be proposed in the next fiscal year.

 

The education fund donation program, which was launched in 2013, offers a gift tax exemption on lump-sum donations of up to 15 million yen to children and grandchildren under age 30 for education purposes. The money can be withdrawn from trust banks and other financial institutions in exchange for receipts for school tuition and preparatory school expenses. The envisaged plan will call for expanding this coverage to include children from low-income households who are not related to those providing the donations.

 

The proposal is intended to cover children from households that are exempt from residential tax payments. It will call for such measures as setting up public- and private-sector councils in each prefecture to match philanthropists looking to support children who wish to study at their alma maters with those who need financial support.

 

Under the existing system, children from low-income households need to pay about 4.5 million yen in tax when they receive donations of 15 million yen from philanthropists. (Abridged)

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