Mr. Buck to Mr.
Ray.
Legation of the United States,
Tokyo, Japan
,
May 9,
1900
.
No. 424.]
Sir: As a matter of some interest, I have the
honor to inclose herewith a copy of a communication from Rev. James W.
Doughty, an American missionary, together with a copy of my reply
thereto, upon the subject of payment of income tax by our missionaries
in Japan. I also inclose copies of instructions of the revenue officials
of Yokohama concerning payment of income tax, published in the Japan
Mail on the 13th ultimo.
There has been much inquiry from missionaries concerning this subject.
Some of them are of the opinion that, because their incomes are derived
from the United States in the form of salary for mission work, a proper
construction of the provisions of law in respect to income tax would
exempt them from that tax, while others take the view that a reasonable
interpretation of the law makes salaries of missionaries subject to tax,
and that, even if, through any technicality, the payment of such tax
could be avoided, it would be unwise to make serious opposition to
payment, because the irritation of the Japanese officials, whose
friendship it is important to cultivate in all proper ways, that a
contest would naturally cause might result in injury to the successful
prosecution of their work.
After a careful examination of the law, I see no reasonable
interpretation [Page 761] that will
warrant objection to pay the tax and bringing the question into the
courts, as some have proposed; and I have uniformly advised payment on
the grounds set out in my reply to Mr. Doughty herewith.
In closing it may be proper to add that there is no discrimination
against foreign missionaries complained of or made. Buddhist and Shinto
priests are, I am told, also subject to tax on their incomes, the only
question raised being whether incomes received by missionaries from
abroad should be taxed as are incomes derived from local sources.
I have, etc.,
[Inclosure 1.]
Mr. Doughty to
Mr. Buck.
Hiroshima
,
April 30,
1900
.
Dear Sir: I am sorry to trouble you, but I
am uncertain as to the matter of income tax. I understand that you
have stated that you think the missionaries come under the law. I
have been reading over the law and came across the following
passage:
- “5. Although all incomes realized from property, trades,
businesses, or occupations in places where the income-tax
law is in force must be reported, the incomes falling under
any of the following heads need not be reported, as they are
not taxable incomes:
- “3. Incomes realized from property, trade, business, or
occupations in a foreign country or in places where the
income-tax law is not in force.”
The above, I observe, is not the law itself, but instructions issued
as explanation of the law, and was published in the Japan Mail of
April 14, and also in a recent issue of the Kobe Chronicle. I
presume you have seen the above, but if I had not heard that you
think we will have to pay the tax I should have assumed that the
above exempted us. If not too much trouble, will you kindly let me
know why you think we are not exempt under the above
instruction.
[Inclosure 2.]
Mr. Buck to
Rev. Doughty.
United States Legation,
Tokyo, Japan
,
May 7,
1900
.
Dear Sir: I have to acknowledge the receipt
of your letter of the 30th ultimo, in which you express the opinion
that missionaries should be exempted from the income tax under the
instructions issued by the revenue officials of Yokohama, as
reported in the Japan Mail of April 14, and requesting me to let you
know why I think differently.
The portion of the regulations referred to, quoted by you, reads as
follows:
- “8. * * * Incomes falling under any of the following heads
need not be reported, as they are not taxable
incomes:
- “3. Incomes realized from property, trade, businesses, or
occupations in a foreign country or in places where the
income-tax law is not in force.”
I fail to see how the above sections apply in any way to a missionary
laboring in Japan. The obvious and only possible meaning of the
instruction is that “incomes realized from property, trade, etc., in
a foreign country (America, Europe, etc.) or in places where the
income-tax law is not in force (Formosa, the Loo Choo and Bonin
Islands)” are not taxable incomes. But the occupation of the
missionaries in question is in Japan, where
the income tax is in force, and they
therefore are included under the first paragraph of the instructions
referred to, which reads in part as follows:
“Any person who has in any part of this country, where the income-tax
law is in [Page 762] force, a
residence or place of abode, or who resides in a fixed place for one
year or more, and has an income of 300 yen or more per annum, is
under obligation to pay income tax.”
Under paragraph 7, section 8, income derived from a business or
profession, is denned to mean “income derived from commercial,
industrial, and other businesses or professions or scientific and
technical occupations, and from all classes of
labor not otherwise enumerated” which certainly is
comprehensive enough to include the missionary profession; and much
as I wish that the missionaries in Japan may be relieved of all
possible financial burdens, I can see no ground, under my own
interpretation of the law or that of the Japanese Government
furnished me by the finance department at my request—which coincides
with my opinion—for a claim by the missionaries for exemption from
the income tax. Moreover, it is my opinion that, even if there were
a technical ground for such a claim—which I can not find—it would be
better as a matter of policy for the missionaries to pay the tax
than to make objections that might prejudice their work in the eyes
of the Japanese officials under whose protection, in a large
measure, they now are.
By section 5 of paragraph 5 of the regulations quoted, “traveling
expenses, educational funds,” etc., are declared to be exempt from
the income tax. Accordingly it is my opinion that special allowance
made by the missionary boards for the purposes mentioned, distinct
from the salary, need not be included in the report of income made
to the officials, though I am not aware what interpretation the
Japanese authorities put upon that section.