Press translations [Japan]. Economic Series 0201, 1946-01-24.

Full Translation:

Agriculture and Forestry Minister SOEJIMA explained his food policy, in an interview with newspaperman, following a Cabinet meeting held 22 January:

"I am afraid that the expression 'compulsory enforcement' gave cause for misunderstanding in public. However, the intention of Agriculture and Forestry is to so improve conditions that these compulsory measures will not have to be employed. I formerly headed the Ministry when the Cereal-Expropriation Law (KOKURUI SHUYO REI) was promulgated, but this law was never enforced.

Concerning independent control of foodstuffs, if anyone has any practical ideas about it, I wish he would submit them. Revision of rice control into a monopoly system is being considered. This subject will be discussed at the round-table meeting of economic ministers. But whether it is to be enforced has not yet been decided."

Full Translation:

The Agriculture and Forestry authorities, who are studying problems concerned with raising the price of cocoons, increasing rice distribution, reorganizing the system of cocoon storage in preparation for the export of raw silk in exchange for food, and who are to set a new price for cocoons between January and February 1946, should investigate fully the export price of raw silk as compared with war time production expenses. These nearly equal the production expenses of rice, wheat and other agriculture products.

When calculating the new export prices, factors to be considered are: 1. inflation throughout the country and instability of exchange rates; 2. comparison between raw silk and nylon; 3. difference between raw silk and food prices.

It is unfair to estimate the price of cocoons at three times the price of rice when rice has risen from 95 Yen to 150 Yen per koku. Manufacturers, who had requested a raise of three times the price from the Government, just after the end of the war, have lately requested a raise of from four to five times the price. The authorities, considering the problem, will raise the price from 300 yen to 400 yen, due to the supply and demand of staple foods this year.

ECONOMIC SERIES: 201 (Continued)

Summary:

Corporation War Profits Tax

The purpose of the Corporation War Profits Tax (HOJIN SENJI RIEKI ZEI) is to collect all profit gained by corporations during the war, and to establish post war financial stability, thereby contributing toward the maintenance of the national economy.

Those corporations which have main offices, and those which have properties or which transact business in the locality where the tax bill takes effect at the time of the property investigation, will have to pay the war profits. Tax The War profits Tax will be levied upon all war profits of those corporations which have their main offices in the locality where the new tax law takes effect, while for those which do not have such offices in the tax area, the War profits Tax will be levied upon only war profit gained by properties located or business transacted in that locality.

The war profits of those corporations which have their head or main offices in the locality where the law takes effect at the time of the investigation is the balance between the total revenue and debt, during the period between the beginning of the new fiscal year, but after a lapse of one year, from 1 April 1940 and the date of the property investigation. (This period hereafter will be called the calculation period.)

Necessary provisions in connection with the calculation of war profits will be promulgated later. Among those now being considered are the exclusion of profits brought forward from the preceeding year from the calculation of war profit taxation. However, debts brought forward from the preceeding year will be calculated.

It is understood that special examples, in connection with the calculation of profits of the corporation Tax law, which are approved in accordance with the provisions provided in paragraph Four of Article One of the Extraordinary Tax Readjustment Law (RINJI SOZEI SOCHI HO), will also be admitted upon enactment of the new tax law. For example, Governmental subsidies which were granted to corporations for the increase of capitalization, will not be calculated as profits if they were used for that purpose. On the other hand, those expenditures laid out for the investigation of special enterprises will be calculated as debt.

The calculation of war profits its will be conducted, for the most part in a way similar to the cases of the corporation Tax Law. Revenue and expenditures of the common trustee funds will be subtracted from the profit and debts, respectively, in the calculation of war profits by trustee companies. When corporations are amalgamated, during the calculation period, all actions or calculations conducted by the individual corporations will be treated as those made by the new amalgamated corporation. In other words, of all war profits gained by the individual corporations that enter the amalgamation will be included among the similar accounts of the newly amalgamated corporation or new organization.

Where corporations were amalgamated after the date of property inspection, those amalgamating corporations or new corporation created by the amalgamation, are responsible for the payment of war profits taxes assigned to the amalgamated corporations.

Non-profit corporations, which are exempt from the corporation tax in accordance with provisions specified in the corporation Tax Law or other similar ordinances, will also be exempted from

- 2 -

ECONOMIC SERIES: 201 (Continued)

ITEM 3 (Continued)

the corporation war Profits Tax. Only those corporations which are liable for the payment of the Corporation Tax are subject to the levy of the Corporation war Profits Tax. Therefore the new tax will not be levied upon Agricultural Associations (NOGYOKAI) and similar special organizations, upon which the Special Corporation Tax is levied.

The tax rate for Corporation War Profits Tax is 100 per cent. The amount of payable taxes is not always 100 per cent of the profit gained during the calculation period, but deductions will be made in the following cases:

• (A).The tax which the corporations have paid or have to pay during the calculation period, and which are not calculated as debt in the calculation of profits as provided in provisions of the corporation Tax, will be exempted.
• (B).Those expenditures made as taxes, dividends, or bonuses, from among the war profits will be excluded from the taxation. In other words, the increased amount of reserve funds during the calculation period will, in most cases, be subject to taxation.

For disbanded corporations, the try will not be levied in the event that liquidation has been completed, prior to the date of the investigation. Unless the liquidation has been completed, those corporations are subject to taxation. In such cases, profit gained during the period of liquidation will not be regarded as war profits.

To those corporations which do not have their head or main offices, at the time of the property investigation, in the locality where the law is enact[illegible]d, the Government will give directives regarding the calculation of their dividends and bonuses for subtraction from the taxable amount. However, it is anticipated that such accounts will be calculated in proportion to those paid in the locality where this law takes effect.

DISTRIBUTION "X"

- 3 -