“Furusato Nozei” Donations Hit Another Record High in FY 2025

Tokyo, July 31 (Jiji Press)–The total amount of “furusato nozei” donations to local governments across Japan hit a record high for the sixth consecutive year in fiscal 2025, which ended in March, the internal affairs ministry said Friday. The annual amount rose 4.6 pct from the previous year to 1,331,428 million yen. The number of such donations also hit a record 59,630,027. Although a new rule was introduced in October 2025 to effectively ban donation portal sites from awarding reward points to users, a ministry official said that the ban did not reduce donations. The western city of Izumisano, Osaka Prefecture, received the largest amount of donations, at 23,039 million yen, followed by the northern town of Shiranuka, Hokkaido, at 22,329 million yen, and the southwestern city of Miyakonojo, Miyazaki Prefecture, at 21,646 million yen. Under the furusato nozei system, all but 2,000 yen of a donation is deducted from the donor’s residential and income taxes. Such residential tax deductions will total 952,442 million yen in fiscal 2026. Major urban areas have continued to see significant tax revenue outflows, with Yokohama, south of Tokyo, posting the largest loss, at 37,330 million yen, followed by the central city of Nagoya, at 21,532 million yen, and the western city of Osaka, at 20,703 million yen. The number of people receiving tax deductions under the system in fiscal 2026 totals a record 11,514,115, up about 720,000 from the previous year. Donations made through portal sites accounted for 97.2 pct of the total. Local governments paid 149 billion yen, equivalent to 11.5 pct of total donations, in administrative fees to portal site operators. In May, the internal affairs ministry requested that portal site operators swiftly cut their fees. They are required to submit their response plans by the end of August, and the ministry will take them into account when considering future measures. The central government also plans to lower the cap on furusato nozei-related costs, including return gifts, from the current 50 pct to 40 pct of donation amounts, so that local governments can raise more funds. END [Copyright The Jiji Press, Ltd.]