Japan “Furusato Nozei” Commission Fees Top 10 Pct of Donations

Tokyo, May 12 (Jiji Press)–Commission fees paid by local governments to intermediary website operators for Japan’s “furusato nozei” hometown tax donation program reached 11.5 pct of the donated amount in fiscal 2024, an internal affairs ministry survey showed Tuesday. The ministry plans to urge such portal site operators to lower their commission fees. According to the recently enacted revision of the local tax law, the amount of the furusato nozei donation money local governments can use as their own financial resources after deducting costs will be raised to at least 60 pct of the donated amount over the next four years. “Commissions for websites alone have reached a high level,” internal affairs minister Yoshimasa Hayashi told a press conference. “We’re strongly aware of this issue.” In the survey, conducted between February and March, the ministry asked 1,788 local governments across Japan how much they had paid portal site operators. Of the 1,202.5 billion yen in donations made via furusato nozei portal sites, commissions came to 137.9 billion yen, comprising 116.6 billion yen in outsourcing fees and other administrative costs, 16.1 billion yen in financial settlement fees and 5.2 billion yen in public relations costs. Of those surveyed, 228 said they negotiated with website operators to lower administrative costs. Only 13 of them said they gained agreement to cut the costs, leading to calls urging the central government to address the situation. Under the furusato nozei system, local governments are required to limit their procurement costs for return gifts to no more than 30 pct of the donation amount. The ministry believes that lowering commissions is necessary as it aims to bring down local governments’ total costs to collect donations, including expenses for the return gifts, to no more than 40 pct of the donation amount, and raise the portion the local governments can use to 60 pct or more of the donation money. Under the furusato nozei system, the amount of donations to local governments of the donor’s choice minus 2,000 yen is deducted from the donor’s residential and income taxes. Many local governments offer return gifts to donors. END [Copyright The Jiji Press, Ltd.]