# Dinner on the tax agency

- Author: Joichi Ito
- Date: 2003-02-27T22:29:00Z


This evening was yet another surprising evening for me. After writing this morning about suing the tax office, this evening was my first day on the board of the National Tax Bureau's study group on IT and taxation. They served a yummy dinner which I mentally subtracted from the tax money they owed me... The irony of being threatened by some folks in the local tax office and being treated like an important expert by the head of the Tax Bureau was... ironic.

I kicked off the discussion part of the meeting with my opinion that the government should think of itself as a service and the taxes payment for those services. When you have a captive market, you forget that on one level, the citizens are your customers. When trying to think about how to tax stuff on the Internet, you have to think in terms of "how much value are we adding?", "what is it worth?", "how do we get paid?" It's probably better to think about the power law curve and marketing than to think about things in terms of the current tax framework.

My position is that consumption tax or a VAT tax should be levied since it is easier to track. Japan's consumption tax is only 5%. Dump all of those complicated taxes on things you can't track. Then provide services that you can charge for. If your services are not competitive, privatize them.

Many people think a national ID with a central record of all transaction are the way to go. I opined that a more distributed method that triggered payments on certain types of taxable transactions without tracking ID might work better and protect privacy.

Anyway, it was weird at the beginning, but turned out being a lot of fun seeing and thinking about things from the perspective of the Tax Bureau.





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Japanese Politics