WHA Annual Meeting: Korea 2026

The Japanese income tax law, enacted in 1887, was a partial result of effort for transforming own state system fitted into the wave of economic globalization during this period. From this point of view, it can be interpreted as a path-breaking example due to swift introduction of tax system of advanced countries and following success on its application. However, though it became an important source of tax revenue in Japan, the government and the Japanese tax authority gradually confronted with some problems with regard to tax collection. In the early 20th century, when the government frequently revised the income tax law for raising revenues, strategic tax planning had gradually applied by firms and elites, those of whom were main targets for income taxation. The government began to consider their strategy as a part of tax avoidance. However, as limited but considerable progress of democratic parliamentary system became apparent during this period, any effort to restrict such conducts faced with resistance from targeted payers and interest groups, which consequently influenced on the content of the revised law.
This paper aims to discuss and explore efforts of the government and the tax authority to control and limit organizational conducts to reduce tax burden by targeted taxpayers. Particular attention will focus on the role of enforced regulations and confidential notices that supplementary issued and enacted for the income tax law enforcement. Examination of these additional rules applied to the formal law will demonstrate some particularity of Japanese operation of law, which gave priority on bureaucratic governance. It will also reveal the complicated process of localization of the particular system, which originated in the global model. In addition it will indicate reality of the interwar Japanese policy that characterized by devotion on the national interest to make Japan as a globally influential state.