#Japan #Tokyo #Digitalization #Money Forward #Cost MIRAI

Money Forward Joins the Cost MIRAI Council

Recently, Money Forward, alongside other leaders in cloud-based expense processing services, has taken a proactive step by participating in the Cost MIRAI Council. This initiative aims to promote the further digitalization and efficiency of expense management through specific tax reform proposals. The Council, which includes four key firms—Concur, BizReach, and Raksul—has announced its recommendations towards the reform of tax regulations to streamline expense processing.

The proposal emphasizes reverence for the aims of the new Invoice System while calling for adjustments that respect practical business operations established since the relaxation of electronic bookkeeping requirements in 2016. The need for reform stems from growing concerns that operational burdens and human costs associated with expense processing are increasing under current laws.

The Council has identified two main recommendations:

1. Inclusion of Company-issued Corporate Credit Cards in Expense Exceptions: There is a strong call for incorporating payments made via company credit cards into the special exceptions for travel expenses. This adjustment recognizes the modern payment practices of businesses, allowing for broader applicability of existing tax exceptions.

2. Exemption from Invoice Attachments for Cashless Transactions: The Council proposes that cashless payments concerning certain employee expenses not require an invoice receipt or attachment when claiming input tax deductions under the Consumption Tax Act. This is particularly beneficial when dealing with expenses where tax rates may vary or transaction nature is ambiguous. Existing invoice regulations require storage of invoices in specific timeframes, which can be burdensome for businesses.

Amidst apprehensions regarding the potential regression of digitalization benefits under the Invoice System, which complicates companies' operational efficiency, these measures could significantly alleviate administrative burdens and foster a more productive fiscal environment. The recommendations align with Japan's forthcoming tax reform guidelines and the National Tax Agency's efforts towards digital transformation in taxation.

Expressions of agreement emanate from various organizations, including the Japan Economic Club, which endorses the proposals while wishing for realization of equitable and practical tax systems that do not impede operational progress.

Endorsements are also made by the Japan CFO Association, emphasizing how aligning tax regulations with modern financial practices can enhance transparency and governance in corporate accounting.

The Cost MIRAI Council is committed to continual dialogue with relevant government agencies and industry groups, aiming to bridge the gap between regulations and real-world practices. Their goal is to facilitate further digital transformation in business operations across Japan.

To read the full recommendations by the Cost MIRAI Council, you can access them here.

Conclusion

As Japan moves forward, maintaining a competitive edge in the global market necessitates the ability to adapt efficiently to digital transformations. The proposals by the Cost MIRAI Council represent a significant step toward resolving the challenges facing businesses today while enhancing productivity and accountability in financial management. Through continued advocacy and collaborative efforts, stakeholders can contribute to building a fair and effective economic framework that benefits all participants in the business ecosystem.