Tax breaks eyed for telecommuting firms

The Yomiuri Shimbun

In an effort to promote the telecommuting system, which enables people to work at home by using an electronic linkup with the office, the government plans to provide, starting in fiscal 2007, fixed asset tax breaks to companies that introduce facilities for such a system, according to government officials said.

Working at home will make it easier for employees to take care of their children and parents while reducing road traffic and easing overcrowding on trains, the officials said.

The government plans to use the tax breaks to double by 2010 the number of telecommuters, estimated at about 6.74 million in 2005, or about 20 percent of the working population.

Companies that introduce a "thin client system," in which a server manages personal computer data from telecommuters at home, will be eligible for the tax breaks.

Since the system only allows specific people to use it in specific circumstances, information leakage can also be prevented.

However, with investment costs amounting to tens of million yen, companies are reluctant to introduce the system.

As such, to promote the introduction of the system, companies that decide to introduce the telecommuting system will see their fixed assets tax cut by one-third over five years if they buy the application server, the sources said.

The government figures that the introduction of the system by about 300 companies would produce tax cuts amounting to a total of about 140 million yen over five years, the sources said.

For the time being, the tax breaks will be offered for two years from fiscal 2007, but the government will consider extending the tax cuts after fiscal 2009 if many companies introduce the system, the sources said.

Telecommuting is expected to improve work efficiency, give employees more time to raise their children and nurse their elderly family members, while lightening the burden of commuting.

In his policy speech delivered on Jan. 26, Prime Minister Shinzo Abe expressed his eagerness to promote the telecommuting system, saying that through reviewing the working method and doubling the number of telecommuters, the government would actively promote the harmony of working and family lives.

A survey on telecommuters by the Construction and Transport Ministry estimated the number of telecommuters at about 6.74 million in 2005, accounting for about 10.4 percent of the working population, an increase of about 1.7-fold from the 6.1 percent working at home in 2002.

By category, corporate employers stood at about 5.06 million and self-employed people at about 1.68 million.

Of the employers, 21 percent were in the service sector and 20.3 percent in the manufacturing industry.

Of the self-employed, 29.6 percent were in the service sector and 17.4 percent in the wholesale and retailing sectors.