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Cost cutting measures to hurt local Preschools

Date Posted: 2005-04-01

The level at which businesses must pay Japanese consumption tax drops significantly tomorrow as the new fiscal year begins in Japan.

The law change, a part of government efforts to reduce the budget deficits, drops the level from ¥30,000,000 to ¥10,000,000 on which a five percent tax must be paid. For 90% of the private preschools in Okinawa, the measure threatens the schools’ very existence.

School association officials say they’ve no choice but to pass the increased costs on to parents, who already may be struggling to make ends meet. Since the schools are private, and not approved by the government, they cannot receive subsidies from either cities or the Prefecture. There are 521 such preschools in Okinawa that are not approved. With the new rules, they’ll have to pay ¥500,000 in taxes.

“We’ll have to price up the cost for attending,” says one preschool official. Right now parents pay ¥20,000 to send one student to school. Now we’ll have to increase the cost to ¥30,000 per month, and we’re sure the parents will be saying it’s too much.” The 50% enrollment increase is triggered by Okinawa Prefecture’s not having approved preschools. Officials acknowledge the strain will be on parents, but say there’s nothing they can do.

The situation will become problematic for the Okinawa Prefecture government, school officials say, because there must be some form of schools operating to take care of children. More families in Okinawa have both parents working than elsewhere in the country.

By comparison, less than 20% of mainland Japan preschools operate without government approval.

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