<figure id="attachment_452878" class="wp-caption alignnone" style="width: 6000px;" aria-describedby="caption-attachment-452878"><a href="#" data-ident_hash="0fb9d277"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2026/01/49ccf7bdc9173dea24f0fadc4155f713.jpg" alt=""></a><figcaption id="caption-attachment-452878" class="wp-caption-text">Prime Minister Sanae Takaichi announced on the 5th, at a New Year’s press conference, that she would launch later this month a “National Council” to discuss the system design of a tax credit with cash benefits. She made no mention at all of the indispensable requirement for introducing the system: linking the My Number system with all savings and deposit accounts.</figcaption></figure>
<h3>Financial assets are being targeted</h3>
〈As a first step toward realizing fair ability-to-pay contributions at medical service counters regardless of age, financial income will be reflected in the counter burden ratios, etc., for elderly people〉
The government clearly stated this in the “Comprehensive Economic Measures to Realize a ‘Strong Economy,’” which was approved by the Cabinet on November 21, ’25. The plan is to grasp financial income such as stock dividends and bond interest earned by elderly people and reflect it in the insurance premiums and out-of-pocket payments of the medical care system for those aged 75 and over.
As with National Health Insurance, premiums for the medical care system for the latter-stage elderly are calculated by municipalities based on the previous year’s total income. However, income such as stock dividends is not included in the calculation unless a tax return is filed, and therefore is not reflected in the burden. It has been pointed out that it is unfair for the burden to differ depending on whether or not one files a return.
According to the Ministry of Health, Labour and Welfare, about 40% of medical expenses for the latter-stage elderly—excluding their out-of-pocket payments—are covered by insurance premiums paid by the working generation. By grasping financial income, the aim is to have wealthy elderly people bear a burden according to their ability to pay and thereby reduce the social insurance premium burden on the working generation.
As for the method of grasping this income, the envisioned mechanism is for municipalities to make use of income information that securities companies submit to the National Tax Agency. Issues include mandating online submissions, thoroughly assigning My Numbers, building databases, and modifying municipal systems, and it is said that actual implementation will take several years.
“It may take that much time. A minimum tax (additional taxation measure) on ultra-wealthy individuals with annual total income of 3 billion yen or more began in ’25, but the decision to introduce it was made back in ’22 under the Kishida (Fumio) administration. As with that, it does take time.
However, for securities accounts, the assignment of My Numbers was made mandatory in ’16, and registration is required when opening an account. Except for old accounts with absolutely no transactions, I think it is possible to grasp stock dividend income, capital gains, and the like quite well for accounts where money is moving.”
This is according to Toshihiro Enami, adviser at the Administrative Systems Research Institute and chief researcher at Tateshina Information, who is thoroughly familiar with the system design of the My Number system.
“From the outset, the My Number system has had as its primary objective the realization of a fair and just society. My personal feeling is that we have finally reached the stage where My Number can be useful for its original purpose.” (Enami; same below)
On the Ministry of Internal Affairs and Communications website, it states that through the My Number system, it will become easier to grasp the income status, etc., of citizens, making it possible to prevent unfair avoidance of taxes and social security burdens and fraudulent receipt of benefits, and furthermore to provide finely tuned support to those who are truly in need.
“In Japan today, income disparities between the wealthy and the poor are widening, and we are trying to implement one measure after another—tax cuts, benefits, and so on—but then the question becomes: where will the funding come from? Inevitably, the discussion has to turn to let the wealthy bear the burden.
While Japan’s Gini coefficient, which indicates income inequality, continues to rise, a survey released recently by the Ministry of Health, Labour and Welfare shows it has reached a record high. Since redistribution through taxes and social security is functioning to some extent, post-redistribution income inequality is more or less flat. However, unless we strengthen the income redistribution function, disparities will widen further and social anxiety will only continue to grow.”
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<h3>All-Account Management With No Escape</h3>
The government has also clearly stated in the “Comprehensive Economic Measures to Realize a ‘Strong Economy’” that it will begin working on the system design of a tax credit with cash benefits, which combines tax deductions with cash payments. The aim is to reduce the burden of taxes and social insurance premiums on low- and middle-income earners and increase the take-home pay of the working generation in accordance with income. A “National Council” including experts will be established in January ’26, and a concrete proposal is to be compiled within the same year.
Introducing a tax credit with cash benefits requires accurate grasping of income and assets, and for that purpose it is indispensable to link all savings and deposit accounts held by individuals with the My Number system.
“Linking bank and other financial institution deposit accounts with My Numbers began in ’18. However, whether or not to assign a My Number to an account is optional. Since it has not yet been made mandatory, it is not possible at this stage to grasp savings and deposits.”
A tax credit with cash benefits is a system that deducts a certain amount of income tax according to income, and provides the portion that cannot be fully deducted as a cash payment to people with low incomes. This ensures that support reliably reaches households with little tax burden.
“If all of an individual’s savings and deposit accounts are properly linked to their My Number and a tax credit with cash benefits is introduced, it will be possible to quickly provide cash payments, in a targeted manner, only to those who are truly in need.”
From ’23 to ’24, support payments in response to rising prices for energy and food were provided to households exempt from resident tax. However, because eligibility was limited to non-taxable households, payments must also have been deposited, for example, into elderly households with little pension income but as much as 100 million yen in bank savings.
If a tax credit with cash benefits were introduced, such cases would likely disappear.
“However, to introduce a tax credit with cash benefits, it is necessary to gather income information—with My Numbers attached—for everyone who has income, at the tax office, and to create a system that allows the tax office to grasp the overall picture. Moreover, systems must be designed together with on-the-ground operations, so they cannot be designed without the cooperation of those in the field. It will probably take at least several years to implement.
But making the assignment of My Numbers to savings and deposit accounts mandatory can be done if there is the will to do it. The government seems to want a situation where everything is already in place before the public realizes it, and is gradually filling in the outer moat. However, since linking My Numbers is indispensable for a tax credit with cash benefits, it should be made mandatory openly and straightforwardly.
If that happens, My Numbers will be listed on all statutory reports (documents that are required to be submitted to the tax office), making it immediately and easily possible to consolidate records by individual. Fair, impartial, and accurate burdens and support will be realized.”
In ’20, Sanae Takaichi, then Minister of Internal Affairs and Communications, announced that she aimed to make it mandatory to register one account per citizen for linking savings and deposit accounts with My Numbers, with the purpose of enabling rapid payment of benefits in times of disaster and the like. While the minister herself was considering linking all accounts, this was postponed in order to prioritize speedy benefit payments.
The government subsequently solidified a policy of shelving the mandatory linking of savings and deposit accounts with My Numbers. Voices within the ruling party reportedly said that the public has strong resistance to the idea of the state managing all income and assets.
However, now that Prime Minister Takaichi’s approval ratings are extraordinarily high, public backlash against linking savings and deposit accounts with My Numbers may be limited.
The Democratic Party, which once advocated the introduction of a tax credit with cash benefits when it was the ruling party, could well call on a prime minister who is pushing her own long-held views—such as legislating the use of maiden names after marriage and reviewing the Three Non-Nuclear Principles—by saying, “More than that, let’s go ahead and do the My Number linking.”
▼ Toshihiro Enami (Enami Toshihiro): Adviser at the Administrative Systems Research Institute; chief researcher at Tateshina Information. Joined Fujitsu in 1981 and was involved in the development of municipal systems such as the Basic Resident Register. Since 1995, he has conducted research at Fujitsu Research Institute focusing on e-government, e-municipalities, and the My Number system. His publications include Corporate Practice Changed by the Digital Procedures Act (Nippon Horei Publishing) and The Curse of My Number (Aoyama Life Publishing), among others.

 Sayuri Saito

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