What should be questioned is not the taxpayers' "abuse of the system," but the administration's ability to manage the system.
Regarding the renewable energy system, the renewable energy surcharge borne by the public is said to have reached a cumulative scale of approximately 20 trillion yen.
The issue here is not a story about 20 trillion yen literally vanishing.
More serious is the fact that, regarding a system that has generated such a massive public burden, the responsible administration cannot immediately explain the final recipients and the overall picture of the funds to the public and the Diet in a comprehensive, list-like format.
Despite operating a massive system, it is impossible to immediately answer as a whole system to whom, how much, and with what kind of policy effects the funds flowed.
That is the question now being asked.
And when looking at this issue, a natural question arises.
How can the Ministry of Economy, Trade and Industry, which has failed to comprehensively grasp even a scale of approximately 20 trillion yen in systems, be so certain that it was able to uniformly and accurately manage only the angel tax incentive through prefectures and other local governments nationwide?
This is not a matter of emotion.
It is a perfectly rational question regarding the institutional management capacity of administrative organizations.
The angel tax system is not a program handled exclusively by the Ministry of Economy, Trade and Industry.
The Angel Tax Scheme is a preferential tax policy designed to promote startup investment by individual investors.
In that procedure, the startup first submits an application for confirmation to the prefectural government or similar authority regarding the target company's requirements and the fact of investment.
The structure is such that after the prefectures or other entities verify it, they issue a confirmation certificate to the enterprise, and the investor submits that confirmation certificate to the tax office when filing their final tax return. In other words, while jurisdiction over the system lies within the administration of economy and trade, the specific verification work is decentralized to the prefectures and other entities, and the national tax authorities are also involved in the final tax processing.
Looking at this institutional structure calmly, the operational difficulties are clear.
Multiple entities are involved, such as the Ministry of Economy, Trade and Industry, prefectural governments, tax offices, investee companies, investors, and in some cases, certified limited liability partnerships for investment.
Furthermore, the items to be verified include numerous requirements, such as the company's establishment date, R&D expenses, sales revenue, number of employees, ratio of external capital, timing of investment, and manner of share acquisition.
For representatives nationwide to look at the same materials, make the same legal interpretations, and arrive at the same conclusions, at least the following mechanisms are essential.
Unified review criteria, detailed case studies, ongoing training, centralization of questionable inquiries, retention of judgment records, cross-jurisdictional inspections among prefectures, and interpretation coordination with the national tax authorities.
So, did these really work well enough?
Can the administration explain that with objective data?
Who should take responsibility between "the local government that issued the confirmation document" and "the national tax authorities that later deny it"
The biggest problem with the angel tax system lies in the fact that different administrative bodies are responsible for the entry and exit points of the system.
At the entrance, prefectures and other authorities verify the system requirements and issue a confirmation certificate.
The taxpayer relies on that administrative confirmation to make an investment and files a tax return.
However, at a later date, the national tax authorities may adopt a different interpretation and deny the tax treatment based on the substance of the transaction, the flow of funds, the investment purpose, or other reasons.
Of course, having a confirmation letter from the prefectural government or similar authorities does not exempt you from all tax issues.
However, if another administrative agency later evaluates it as an "abuse of the system" for a taxpayer who believes they proceeded legally after receiving confirmation from the administration in charge of the system, the disagreement of views within the administration must first be verified.
Was the administrative side's decision to issue the confirmation document appropriate?
How clear of a judgment criterion had the Ministry of Economy, Trade and Industry provided to prefectures and other authorities?
Were inquiries from prefectures and other local governments shared centrally?
Were there any differing responses given depending on the region for similar cases?
Was a unified interpretation regarding the purpose and scope of application of the system formed between the national tax authorities and the Ministry of Economy, Trade and Industry?
Failing to verify this and demanding only that taxpayers "should have understood the intent of the system" is entirely one-sided.
If even the government agencies that created the system could not form a common understanding, that ambiguity cannot be shifted onto the intent or malice of the taxpayers.
Now that doubts have arisen regarding the management of a 20-trillion-yen-scale system, the premise that "other systems were flawless" has collapsed.
The renewable energy surcharge system and the angel tax incentive differ in both their purposes and mechanisms.
Therefore, administrative issues within the renewable energy system do not directly prove the misapplication of the Angel Tax System.
However, from the perspective of administrative evaluation, what is important is not merely the differences between individual systems.
The question is whether the same ministry had the ability to design a huge and complex policy system, operate it through local governments and private businesses, grasp the results, and correct any problems.
Given that the problem has actually arisen where the final flow of funds for a system on the scale of approximately 20 trillion yen cannot be immediately explained to the public, it is only natural to objectively re-verify the operational realities of other systems under the jurisdiction of the Ministry of Economy, Trade and Industry, rather than trusting them unconditionally.
Nevertheless, regarding the angel tax system,
The administration designed the system correctly.
Also correctly checked the prefectures, etc.
The tax authorities also made the correct judgment.
Only the taxpayers were wrong.
Has it been processed under that assumption?
That is the question.
If the administration does not audit its own system operations and forces taxpayers alone to bear the burden of the system's flaws, that is not fair law enforcement.
Was it really applied uniformly nationwide?
The angel tax system is a nationwide system.
However, since prefectures and other local governments are responsible for specific application reviews, regional differences may arise in terms of on-site knowledge, experience, number of staff, and number of applications.
It is unlikely that the examination capabilities and accumulated expertise were completely identical between municipalities that have numerous startups and extensive application experience, and those with a limited number of annual applications.
There will also be personnel changes.
System revisions are also repeated.
For complex cases, inquiries may go back and forth among the applicant, local governments, the Bureau of Economy, Trade and Industry, headquarters, and tax authorities.
To ensure uniform implementation nationwide in this situation, it is not enough for the Ministry of Economy, Trade and Industry to simply post an overview of the system on its website.
Which municipalities reviewed which cases based on what criteria.
What are the numbers of applications, verified applications, corrected applications, and rejected applications for each local government?
Have different decisions been made on similar cases?
Did the agency in charge of the system conduct a cause analysis regarding the cases that were subsequently denied by the national tax authorities?
If there is an error in the verification practices by prefectures or other entities, who corrects it and who bears the responsibility?
Unless such verification results are shown, the explanation that "it was operated accurately nationwide" has no basis.
Rather, in an organization where even the overall picture of the massive renewable energy system could not be sufficiently visualized, it is only natural to suspect that similar information fragmentation and management deficiencies may have existed in the decentralized local tax verification operations as well.
Taxpayers who trusted administrative verification must not be turned into criminals afterwards.
Special care must be taken when cases are treated not merely as tax assessment denials, but as tax evasion incidents.
It is not sufficient to hold someone criminally liable merely because the tax treatment was ultimately denied.
It is necessary to specifically prove intent and fraudulent conduct, such as whether the taxpayer filed the return while aware of its falsity or disguised the facts knowing that the institutional requirements were not met.
I had made a prior inquiry to the administrative agency.
I had received a confirmation letter from the prefectural government or similar authorities.
I had been explained by the expert that it was applicable.
There was no explicit explanation that it was institutionally prohibited.
If such circumstances exist, they will be extremely important factors, at least in determining the taxpayer's intent.
It is dangerous to push forward with a narrative that "the system was abused" without investigating the matter, without sufficiently questioning the taxpayers themselves, and without verifying the actual operational practices of the administration in charge of the system.
An administration whose ability to manage even a 20 trillion-yen system as a whole is being questioned assumes that its own tax policy measures were operated flawlessly, treating only taxpayers as criminals.
Would such investigations and administrative actions be persuasive?
It is the management system of the institution, not the taxpayers, that should be audited first.
If serious cases of denial or criminal cases are arising regarding the angel tax system, what should be done first is not a competition to crack down on individual taxpayers.
It is an administrative audit of the entire system.
At the very least, the following matters should be verified from a third-party perspective.
Were the screening criteria presented by the Ministry of Economy, Trade and Industry to the prefectures and other entities sufficiently clear?
Were there any operational differences by prefecture?
Were system interpretations shared among the Ministry of Economy, Trade and Industry, prefectural governments, etc., and the National Tax Agency?
Have prior inquiries been made to the administration and are the response records properly saved?
Has the administration conducted an analysis of the causes regarding the case where the tax return was denied despite having received a confirmation letter?
Were the decision-making processes of the agency with jurisdiction over the system verified as the subject of investigation regarding the case that later became a criminal matter?
Pursuing only the taxpayers without addressing these issues would obscure the administrative responsibility for system design and supervision.
Question the narrative that "the administration was right, the citizens abused it"
When problems arise in administrative systems, it is often explained that "some unscrupulous business operators abused the system."
Of course, where false applications and fraudulent receipts actually exist, they should be dealt with strictly.
However, those words can also become a convenient expression for concealing the administrative side's institutional deficiencies.
Weren't the institutional requirements ambiguous?
Wasn't there a discrepancy in the interpretation between the competent authority and the executing authority?
Wasn't the guidance provided to local governments insufficient?
Were confirmation and inquiry records not properly stored?
Wasn't the institutional reform thoroughly communicated?
Without this verification, it is easy to conclude that "the taxpayers who exploited the system are to blame."
However, that is not investigating the cause.
It is the externalization of administrative responsibility.
The Ministry of Economy, Trade and Industry has the responsibility to prove that the nationwide operation was accurate.
Given that the Ministry of Economy, Trade and Industry's administrative and explanatory capabilities are being questioned regarding a scheme on the scale of approximately 20 trillion yen, it is not enough for the ministry to simply state that it has been operating the angel tax incentive system "without any issues."
What kind of criteria were presented to prefectures and other local governments nationwide?
How did you identify and correct discrepancies in judgment?
How did you prevent discrepancies in interpretation with the tax authorities?
How were taxpayers who relied on administrative confirmation protected?
It should be explained with specific records and figures.
If the government cannot do that, it loses the right to demand complete explanations and records solely from the taxpayers.
An administration that cannot adequately explain the flow of approximately 20 trillion yen collected from citizens demands a perfect explanation for just one taxpayer's fund transfer a few years later.
Without verifying their own system administration, they simply dismiss taxpayers' transactions as "unnatural."
The municipality takes no responsibility for the confirmation document it issued, placing the blame solely on the taxpayers who trusted it.
This double standard is totally unacceptable.
Conclusion—We must not assume the "infallibility" of an organization that failed to manage 20 trillion yen.
It cannot be concluded immediately from the issues surrounding the renewable energy surcharge that the individual determinations of the Angel Tax System were erroneous.
However, given that the management capability regarding a system on the scale of approximately 20 trillion yen has been called into question, it is only natural that the operation of other systems overseen by the Ministry of Economy, Trade and Industry should also be subject to review.
In particular, the angel tax incentive, which distributes administrative tasks to prefectures and other local governments nationwide and requires coordination with national tax authorities, is not a system that is easy to manage centrally.
That is precisely why the administration has a duty to account.
The fact that the same standards were applied nationwide.
The decision to issue the confirmation letter was appropriate.
The interpretation was consistent with that of the national tax authorities.
The system was operated in a predictable manner for taxpayers.
Unless the administration proves these things, taxpayers alone cannot be accused of "abusing the system."
An administrative organization called into question for its potential inability to manage 20 trillion yen managed to achieve flawless, nationwide, and uniform implementation for the angel tax system alone, without a single error.
Isn't that premise much more unnatural?
Before suspecting its citizens, the government should verify its own institutional management capabilities.
And internal inconsistencies within the administration and flaws in institutional design must not be shifted onto the taxpayer's intent or crime.
What is being questioned is not solely the responsibility of the citizens who used the system.
It is the responsibility of the administration itself, which created the system, delegated it to the regions, managed it, and later denied it based on a different interpretation.
