Many publicly subsidized operators of social welfare services were found recently to have accumulated large amounts of internal reserves. They need to realize that their purpose is not to generate profits, but rather to do their best to utilize their know-how and resources to contribute to improving the well-being of the socially weak, especially low-income people who are not adequately covered by the nation's social insurance systems.
These nonprofit organizations run such facilities as critical nursing care homes for the aged (tokubetsu yogo rojin home in Japanese or tokuyo for short), day-care service centers for children and support centers for disabled people.
Roughly 19,000 of these organizations across the country are exempt from income and property tax payments. Much of the costs to operate their facilities are covered by government subsidies and compensation paid out of social insurance systems. They enjoy tax-exempt status because they are engaged in activities that, unlike private businesses, will not generate profits but will instead enhance public interest.
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