Since the nonprofit organization law went into effect 1998, certified nonprofit organizations (NPOs) have been active in various areas, including welfare, art, culture and education, which the government sector does not and cannot cover. But many of them are financially weak.
Prime Minister Yukio Hatoyama is pushing a "new concept of public service" that envisions people supporting and being of service to each other. In a welcome move, the government plans to introduce a new tax rule from fiscal 2011 that will help NPOs.
Under the new rule, individuals who make donations to certified NPOs will be able to deduct 50 percent of that amount from their actual income tax (as opposed to deductions from their taxable income). The benefits for middle- and low-income donors will be great. It is hoped that the new system will also help expand the reach of useful services provided by NPOs.