Japan to Examine Local Govts over “Furusato Nozei” Gifts

Tokyo, Aug. 14 (Jiji Press)–Japan’s internal affairs ministry will scrutinize how some local governments are offering foreign wine in return for donations made under the country’s “furusato nozei” program, which offers tax relief to donors. Some local governments are treating imported wine as local products by storing and maturing it in areas under their jurisdiction. The ministry will look into whether such a practice deviates from the purpose of the donation program, which allows people to receive tax breaks by supporting their favorite local governments. It will soon send survey forms to local governments across the country and ask them to send back responses by early September. Under the furusato nozei program, local governments are required to limit the procurement costs of return gifts to up to 30 pct of donation amounts. When local governments offer items produced elsewhere as return gifts, the value locally added to the items through manufacturing or processing needs to exceed 50 pct of their procurement costs. Multiple local government are offering foreign wine as return gifts, the ministry said. They claim that extra value is added to imported wine through storing and maturing in local tunnels, sea beds or mines, ministry officials said. The survey includes questions like whether foreign wine is offered as return gifts, and for local governments which say yes, where the wine is originally from, how long it is stored and matured locally, donation amounts required for the wine and the procurement costs. “When people are told that it is a local product, they generally think it was manufactured in the area,” a ministry official said. The ministry will consider whether to review the rules on return gifts after studying survey responses. END [Copyright The Jiji Press, Ltd.]