It is a serious problem for Japan not to be able to impose corporate taxes on online companies at a time when funds for paying into social security programs and public annuities are drying up. It is time to have a sweeping review of the taxation system.

There needs to be a global agreement on taxing multinational online companies, like Amazon. Its really the only way ahead ultimately.

I remember the outcry when the Aus government had the audacity to make Amazon collect the 10% GST on both domestic and international Amazon stores from Aus consumers.....that every other business operating in Australia has to collect. There was a ridiculous response by consumers to that. Much better to let an American company, like Amazon take advantage of the 10% discount they can offer all Aus consumers and in the process punish Australian businesses that have no choice but to collect the GST. That was their view. Selfishness in a nutshell.

No doubt the Japanese government would get the same response.

This is a problem everywhere. Japan gleefully jumped on the globalization, free trade bandwagon and is now reaping its rewards -- profit shifting by huge exploiting corporations and tax base erosion. Let's hear for "borderless trade."

Of course, if the govt not cut corporate taxes at home, even while Japanese corporate profits were at record highs, the problem wouldnt be so bad.

As countries grapple with a shrinking tax base and out of control spending, governments will start to come up with a myriad of schemes to tax everything that moves. Of course, they have no incentive to be more efficient so as long as you are not mobile and able to pick up and leave, stay tuned for an even further increase in income, inheritance, sales, personal asset, VAT, cigarette/ alcohol tax etc. I would venture to say that for every 100 yen they collect in taxes, most of it goes to salaries and benefits (probably true in any country), so you won’t even see the benefits

WHY are funds for public services drying up? Most people I know are not paying less taxes.

"...most of it goes to salaries and benefits (probably true in any country), so you won’t even see the benefits..."

What happens to those "salaries and benefits"? Where do think that money ends up? Here's a hint: very little of it is hidden away in a bank vault in Panama or other obscure, far flung tax haven.

J@jeffLee. I don’t think there’s a lot of that going on in Japan compared to some third world countries, but I meant the overly bloated government sector zombie workforce just collecting their pay and benefits.

WHY are funds for public services drying up? Most people I know are not paying less taxes.

Demographics in the long term. Fewer tax payers = less government revenue for public services (demand for which, despite the smaller population, is going up since the elderly population who are highly dependent on government services is skyrocketing).

Most of big, wide and famous companies likewise: Sony, Toyota, Panasonic, Yahoo, Apple, Google are multinational corporations. It could be online business or not, they have professionals experts from lawyers to accountants to manage tax evasion everywhere in the world, as much as they have properties or loyalties in many countries to pay portions of taxation in every country but can avoid the taxation load of a single country. It's "trick" but legally instrumentation for business, consulting companies also help a lot how to avoid high taxation with a contrast of their size or volume. It should be implemented in international law much fairness on it. But I know why it isn't easy...

I think there is a fine line between tax evasion (illegal) and tax avoidance (legal but is it immoral?)

Demographics in the long term.

Countries with good demographics are struggling. The UK's healthcare and other public services, for example. US infrastructure. College education has skyrocketed in most nations. Housing, food, energy becoming less and less affordable for lower income earners. Nearly all the developed countries are running huge fiscal debts, as well.

The trend started in the 80s, with the shift toward "market economics." Since then, the policies have created a massive flow of money out of the public sector and into the private sector, creating widening inequality and large parts of national income hoarded and hidden by a tiny group of super-super rich.

Countries with good demographics are struggling. The UK's healthcare and other public services, for example. US infrastructure. College education has skyrocketed in most nations. Housing, food, energy becoming less and less affordable for lower income earners. Nearly all the developed countries are running huge fiscal debts, as well. 

The trend started in the 80s, with the shift toward "market economics." Since then, the policies have created a massive flow of money out of the public sector and into the private sector, creating widening inequality and large parts of national income hoarded and hidden by a tiny group of super-super rich.

Yes, but a lot of that stuff is problems specific to the US and UK. In Japan almost everything you describe is the opposite:

1 Infrastructure is good quality. The problem is that the government spends too much rather than too little on it.

2 University education here is still affordable. MEXT strictly controls what public universities charge in tuition.

3 The cost of most things like food hasn’t gone up, the CPI is the same today as it was 25 years ago due to near zero inflation.

4 The cost of housing in particular has gone down over the same period, the real estate bubblesyou see overseas haven’t happened much here (or rather it happened almost 30 years ago here and hasn’t again).

5 The healthcare system here is running smoothly.

Japan has some problems in common, particularly a growing wealth gap (still way less than the US or UK) and a huge public debt (more than the US or UK), and its own demographic problem that sets it apart, but in most areas the society here has avoided the American style decline into becoming a disfunctional banana republic.

2 major issues here; first 19th and 20th century national tax codes are inappropriate for 21st century global on-line businesses, and secondly the big four auditors such as KPMG, pwc, EY and DTT have been found to go beyond their auditing role to consulting and actively helping companies set up myriad schemes to avoid (and in some cases evade) taxes. Compounding this is the size and scope of global corporations whose power now exceeds that of many countries; their lobbying and influence distorts the perspective of lawmakers and bureaucrats, and threats to withdraw services, factories, employees can override national policies.