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Mon, Oct 04, 2004 - Page 12 News List

Minister announces Japan Post to start paying tax in 2007

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Japan Post, the world's biggest savings bank, will start paying taxes after it's sold off in April 2007, said Heizo Takenaka, the minister overseeing the breakup and sale of the state-run company.

"It's important for Japan Post to start on the same footing as other private companies," Takenaka said on Asahi Television's Sunday Project program. "We want to give Japan Post as much freedom and responsibility as we can."

Taxes from Japan Post would help add to government revenue. Japan's national debt, the highest in the world, expanded 3.7 percent to ?729.23 trillion (US$6.6 trillion) in the three months ended June 30 from the previous quarter, the Ministry of Finance said last month.

The government plans to subject Japan Post to the same tax laws as private companies and the nation's Financial Services Agency will also begin inspections, Takenaka said.

"It will help us to understand the scale of Japan Post's bad loans," he said.

Japanese Prime Minister Junichiro Koizumi wants to break up Japan Post into four separate businesses under a holding company to handle mail delivery, insurance, postal savings and management of the network of post offices.

Koizumi is also aiming to curb use of ?350 trillion in postal savings to fund public works projects and free up more money for financing businesses. That would help banks and insurers compete against Japan Post, which has about 25,000 branches.

Takenaka repeated government concerns about a sustained increase in crude-oil prices threatening economic recovery in Japan. "We need to carefully watch the movement" of oil prices, he said.

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