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More than tax system change needed to boost women's workforce participation

The ruling Liberal Democratic Party (LDP) is looking to revise Japan's spousal tax deduction system to prompt more women into the job market. However, increasing women's participation in the workforce faces many hurdles that will be extraordinarily difficult to overcome simply by reforming the tax code.

One 47-year-old woman in Kanagawa Prefecture with one daughter in university and another in high school told the Mainichi Shimbun that she was a housewife when her children were small. Her husband comes home from work late, and she wanted to make sure her daughters were raised properly. Three years ago, she took a part-time sales job, working four hours a day for about 10 days every month, bringing in an income of a few hundred thousand yen annually.

"I could work more. But in my current job, getting over 1.03 million yen per year would be impossible," she said, referring to the income limit to qualify for the spousal tax deduction. The reason: her employer limits the working hours of its part-time employees. And it's not the only one. There are many companies that restrict employee working hours to keep them below the threshold where the firm would have to start paying into the social insurance system -- a serious load on employers.

"I think that it will be very hard for mothers to join the workforce as anything but part-timers unless the way people work is made more flexible to respond to the circumstances of individuals," the Kanagawa woman said.

There are also some people worried about the financial impact of revising the spousal tax deduction system.

A 36-year-old woman in Saitama Prefecture who leaves her child at a daycare center while she's at work at a massage clinic told the Mainichi, "I'm stuck in a tough spot between the wall of the 1.03 million yen deduction restriction and the demerits of working longer hours." More than half her annual income is devoured by daycare fees. However, to earn more money she would have to work longer shifts, meaning she would have to pay more for child care. She would like to get a permanent position, but she lacks formal qualifications and so changing jobs is difficult.

"I can't make ends meet with my current income, but our household would be in real trouble if we lost the (spousal) deduction," she said.

Professor Junya Tsutsui, a family sociology expert at Ritsumeikan University, praised the plan to re-evaluate the spousal tax deduction system, calling it in-line with "a dual income society." However, Tsutsui also cautioned that "the way people work also needs to be reformed at the same time, such as limiting long hours on the job and implementing equal pay for equal work."

In Japan, women now spend about five times as much time doing housework as men. If family and work structures aren't changed to allow men and women to share household chores and childrearing more evenly, it's likely that women wishing to work will be compelled to take on a heavier burden than they already bear. Even with an increase in working hours, as long as women are relegated to non-permanent positions it looks unlikely they will be able to boost family income significantly.

As early as September, the administration of Prime Minister Shinzo Abe will inaugurate a committee to implement reforms to the way of work in Japan. The committee's main themes will be addressing long hours spent on the job and pushing equal pay for permanent and non-permanent workers doing the same work. How far the government can push a "working revolution" in real terms remains a mystery, however.

If firms don't re-evaluate the terms of their own spouse and dependent support allowances, some observers say the effect of the tax code change is likely to be limited. Toyota Motor Corp. is planning to make spouses ineligible for the company's family support allowances by 2021.

This month, the government's National Personnel Authority will also reconsider family allowances for national civil servants. There is apparently a movement in the agency to increase the amount for children while halving that paid for spouses in fiscal 2018. The spousal support allowance is currently 13,000 yen per month. (By Kasane Nakamura and Kayo Inada, Lifestyle News Department, and Taizo Yamada, Medical Welfare News Department)

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