Scalable Method for Paying Income Tax with Smartphone Payment in 2023

Background

December 1, 2022. While a certain cloud service is releasing updates left and right, the National Tax Agency has also released a smartphone payment app.

Previously, there were various methods for paying taxes, including bank transfers, convenience store payments, and credit card payments. However, these methods had their own difficulties. For example, when using nanaco points, the upper limit was around 50,000 yen, so paying 300,000 yen in taxes would require six cards. If you had to pay 3 million yen, you would need 60 cards, and you would receive 10 receipts. This is not only troublesome but also embarrassing.

Credit card payments also had a high handling fee of around 0.8%, making them inconvenient. Additionally, points were not awarded for tax payments, making it difficult to find a beneficial method.

Under these circumstances, the smartphone payment app was released, which seems to overcome the drawbacks of previous methods and offers high scalability. Since tax payments can be large, scalability is crucial. Even if the point return rate is high, it's not useful if the payment limit is low, so we will examine this method while considering the upper limit.

Background Supplement

There are various types of taxes, but this article only deals with national taxes such as income tax and property tax.

Many people are also concerned about resident taxes, but since the update does not affect resident taxes and there are significant differences between municipalities, it is difficult to provide general techniques. However, if your municipality supports mobile payment, such as Mobile Regi, the content of this page may be helpful.

Basic Knowledge - Specifications of Smartphone Payment

Smartphone payment refers to a method of paying taxes using various smartphone apps. There are several services that support this method, including PayPay, Merpay, and Amazon Pay.

This payment method does not require a handling fee, which was a drawback of credit card payments. However, there may be limitations set by the Pay service provider.

In general, Pay services use the balance charged to the app to make payments. Since points are awarded when charging the balance, you can earn points even with credit cards that do not award points for tax payments. However, be aware that some cards do not award points for balance charging.

An important point about smartphone payment is that there is no limit to the amount that can be paid. While it may seem like there is a limit of 300,000 yen, like with Mobile Regi, the official website only mentions "one-time payment." Additionally, the FAQ mentions that you can pay part of the tax amount using the smartphone payment app, so it is possible to make repeated payments.

Pay Services That Can Be Used for Tax Payments

When comparing various Pay services, it is essential to check their upper limits. The upper limit table on the Furusato Choice website is a useful reference.

First, PayPay has a low upper limit for charging with a card, and the daily and monthly limits are 50,000 yen and 200,000 yen, respectively, making it unsuitable for large payments.

d払い has an upper limit of 100,000 yen for balance usage, and bank transfers or convenience store payments are required for each payment. Credit card payments are limited to 50,000 yen per month.

au pay is similar, with a monthly limit of 25,000 yen.

LINE Pay does not allow credit card charging, and the upper limit for charging and paying with LINE points is 500 points per month (5% return). Online and bill payments are not eligible for points, so only credit card points are awarded.

Merpay has a monthly upper limit of 300,000 yen, but since it does not support credit card charging, it is suitable for those who frequently use Mercari.

Ultimately, Amazon Pay is the most scalable option.

Basic Knowledge of Amazon Pay

Amazon Pay uses Amazon gift card balances charged to the account to make payments. This method is essential for earning points. When charging the balance, points are awarded according to the credit card or campaign used.

Amazon Pay is crucial for using the gift card balance for payments, and according to a Yahoo News article, it is possible to use the balance for payments.

While there is no official source, according to the Furusato Choice upper limit table and various EC sites, Amazon Pay has a one-time upper limit of 1 million yen and a monthly upper limit of around 1.25 million yen. However, a card must be linked to the account, and there may be issues with the card company's payment processing.

Additionally, there may be point return campaigns during payment, such as the 1% return campaign for Amazon Pay. However, this campaign does not apply to tax payments.

Credit Cards That Can Be Used for Tax Payments

Here, we will examine the credit cards that can be used for tax payments and their point return rates.

Amazon Prime Mastercard

The Amazon Mastercard is the most efficient card for purchasing Amazon gift cards. Prime members who have the old Gold card can earn 2.5% Amazon points, while new Prime members can earn 2.0% points.

The upper limit is around 200,000 yen per person.

SMBC Platinum Preferred

This card offers a constant 1% point return and is known for its lenient conditions. It is often recommended for earning points.

The new member and usage campaign offers 40,000 points, and the annual fee is 33,000 yen.

The upper limit is 500,000 yen.

American Express Green Card

American Express cards offer a constant 1% point return. While the point return rate was reduced for tax payments, it can be used for Amazon gift card purchases.

The American Express Green Card has a membership rewards plus option, which triples the points earned on Amazon purchases (100 yen = 3 points).

The annual fee is 13,200 yen, and the membership rewards plus option adds 3,300 yen.

Note that American Express points are significantly reduced in value when redeemed for cash, and the exchange rate is around 2 points per 1 yen.

Luxury Card Gold

The Luxury Card is famous for its high point return rate for tax payments. The official website states that the point return rate does not change for tax payments.

This card comes in three types: Titanium (1% return), Black (1.25% return), and Gold (1.5% return), with increasing annual fees.

The upper limit is 1 billion yen.

Conclusion

Here, we have examined several credit cards and their point return rates. To visualize the results, I created a graph using Geogebra.

[Graph]

From the graph, we can see the following:

• Use the Amazon Mastercard up to the upper limit (for Prime members with the old Gold card)
• For amounts above 200,000 yen, use the Platinum Preferred (for new members) or American Express (for amounts above 700,000 yen)
• For amounts above 1.1 million yen, use the Titanium, and for amounts above 2.2 million yen, use the Black or Gold

In this case, if you pay 3 million yen, you can earn around 413,000 points. This is significantly higher than the 90,000 points earned with credit card payments.

How to Actually Make Payments

Finally, let's consider the actual payment process.

Since one-time payments are limited to 300,000 yen, you would need to make 10 payments for 3 million yen. This can be tedious, so it may be helpful to use a system like Selenium to automate the process.

Also, be aware that card companies or Pay service providers may suspect fraudulent activity and reject payments. Be sure to confirm and prepare carefully.

Summary

Smartphone payment is a game-changer, but there are many limitations and precautions to be aware of. While it may seem troublesome, it's essential to investigate thoroughly and confirm before using it.