“Furusato Nozei” Program Posts Losses in Most Years

Tokyo, June 12 (Jiji Press)–Japan’s “furusato nozei” hometown donation program offering tax incentives resulted in aggregate net losses for local governments nationwide in most of the eight years from fiscal 2017 to fiscal 2024, a Board of Audit of Japan survey showed Friday. A net loss means that the combined amount of resident tax deductions and expenses related to the program exceeded that of donations. The board said that the losses may grow if donations continue to increase. Under the program, people can make donations to local governments of their choice and qualify for tax breaks in exchange. Many recipient local governments offer return gifts to donors. According to the survey, the program posted losses every fiscal year except fiscal 2020 and fiscal 2021. The biggest red ink was 106 billion yen, posted in fiscal 2023. Total annual donations grew from 365.3 billion yen in fiscal 2017 to 1,272.7 billion yen in fiscal 2024, leading to an increase in total resident tax deductions from 178.3 billion yen to 768.8 billion yen. The balance of total donations minus tax deductions was positive in all eight years. Meanwhile, total expenses, including those for return gifts, grew from 202.7 billion yen to 590.1 billion yen over the same period, with net losses widening from 15.7 billion yen in fiscal 2017 to 86.3 billion yen in fiscal 2024. END [Copyright The Jiji Press, Ltd.]