Outdated tax policies discourage Japanese women from regular paid work

Time for Japan to update its tax policies to encourage women's fuller and continued participation in the regular paid workforce.

Why does a country with one of the highest rates of working women in the developed world have trouble keeping them in the regular paid workforce?

The World Economic Forum (WEF) reported that Japan ranked lowest among the G7 developed countries in terms of the Global Gender Pay Gap Index. Japan was at 110 out of 149. India, reported by Reuters to be “the world’s most dangerous place for a woman,” ranked higher than Japan holding the 108th place. The WEF measures how countries “leverage their female talent pool” following economic, educational, political, as well as health indicators.

A 2018 report from the Japanese Internal Affairs and Communications Ministry said that 56 percent of working women held non-regular, part-time, and contractual jobs. These jobs often paid less, provided no career growth, and lacked the benefits of regular track jobs.

The Japanese economy is struggling with a shrinking workforce, an old population, and declining birth rates. There are millions of educated women who could enter the regular paid workforce and enter the shoes of the typical “salaryman,” but why don’t they?

Japan, being one of the world’s strictest patriarchal nations, has delegated housework solely be the task of women. Women are expected to not only do all the house chores but also spend much time and effort being the best homemaker.

Even if the woman has full-time paid work, she is still expected to do the majority of the housework. It is reported that women spend an average of 263 minutes per week on household chores while only do so for 46 minutes.

Unfortunately, Japanese taxation laws and policies are biased against encouraging, let alone keeping women in the workforce.

One such law states that the head of the household, who is usually the father, can receive tax deductions amounting to ¥380,000 (S$4640) if he had a documented dependant who made less than ¥1.5 million (S$18,260) a year. If the dependant surpassed that level, the tax deduction is reduced and is completely revoked once annual income hits ¥2.01mil.

Additionally, a large percentage of Japanese companies give out a “dependant allowance” that aims to encourage wives to stay at and maintain the house while husbands work.

Another law states that household dependants – usually wives – who work and earn more than the prescribed tax deduction cap will need to pay into the national pension system. These women may likely earn better pension benefits as dependants than as non-regular labourers.

With these policies, it is no wonder women leave the workforce early in their career to focus on becoming homemakers instead. Even the perspective that maintaining the household is “lesser” work than a full time office job is very much sexist.

Addressing Japan’s gender wage gap and labour practices requires not only a revision of such discriminatory policies but a cultural shift towards a more progressive and equitable gender role perspective.



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