4 Municipalities to Be Banned from Furusato Nozei Program

Tokyo, Sept. 26 (Jiji Press)–Japan’s internal affairs ministry said Friday that it will bar four municipalities from taking part in the country’s “furusato nozei” hometown donation program for two years from Monday due to their excessive spending on the program. They are the city of Soja in Okayama Prefecture, the city of Unzen in Nagasaki Prefecture, the town of Miyaki in Saga Prefecture and the town of Yamato in Kumamoto Prefecture. Donations to the four municipal governments will not be eligible for income and residence tax deductions during the suspension period. Under the program, thank-you gifts for donors should be worth 30 pct or less of the sum of donations. But in fiscal 2024, which ended in March this year, Soja broke the limit by purchasing rice as a return gift at over 27,000 yen per 60 kilograms, far more than 18,000 yen the city had planned to spend before rice prices started climbing in the country. Its ratio of gift purchase costs to donations ended up rising to 46.4 pct. Miyaki, Unzen and Yamato failed to meet in the year through September 2024 the requirement that local governments curb their respective overall furusato nozei-related expenses at 50 pct of the contribution sum, due chiefly to rising shipping fees for return gifts. As a result, they will get the two-year suspension, the first punitive action ever on a violation of the 50 pct rule. The ministry also said it will allow 1,781 prefectural and municipal governments to participate in the tax-deductible donation program in the year from next month, including the city of Sumoto in Hyogo Prefecture, which had been excluded after breaking the 30 pct gift cap. On the other hand, the city of Suzaka in Nagano Prefecture and the Okayama town of Kibichuo will continuously be kept from the program after being kicked out of it in June. The Tokyo metropolitan government has been refusing to be part of the furusato nozei system, claiming that outbound donations driven by thank-you gifts are eroding residence tax revenues for improving local administrative services. END [Copyright The Jiji Press, Ltd.]