TOKYO REPORT: Japan’s Hometown Donations to Refocus on Local Community Ties

Tokyo, June 8 (Jiji Press)–Following an October 2025 revision to Japan’s “furusato nozei” hometown donation program, which offers tax breaks to donors, the internal affairs ministry is seeking to discourage donors from focusing too much on “good deals” offered through generous return gifts. With portal sites now banned from attracting donations by offering reward points to donors, the ministry wants the program to place greater emphasis on building ties between donors and the municipalities they choose to support. It also hopes donors will take a stronger interest in the intrinsic appeal of local return gifts and in how their contributions are used. Companies that operate donation portal sites are stepping up efforts to help donors learn more about regions and local products with which they may be unfamiliar. In particular, they are focusing on hands-on events and initiatives aimed at appealing to fans of specific communities, products and experiences. Race to Win Donations The hometown tax donation program, launched in May 2008, allows taxpayers to donate to local governments they wish to support, including their hometowns. The portion of each donation exceeding 2,000 yen is deducted from the donor’s resident and income taxes in the following fiscal year, subject to income-based limits. In fiscal 2024, which ended in March 2025, donations under the program reached a record high of 1,272.8 billion yen. The number of donors also rose, reaching 10.8 million. The program’s growth has been fueled in part by improvements to online portal sites, which have made it easier for taxpayers to choose municipalities and complete donations. At the same time, competition among these sites has intensified, with many seeking to retain donors by offering reward points. The internal affairs ministry has expressed concern that such practices have strayed from the program’s original purpose of encouraging people to support their hometowns or other municipalities with which they feel a connection. In response, the ministry has banned municipalities from soliciting donations through portal sites that offer reward points. Return Gifts Linked to Hobbies Satofull Co., a Tokyo-based operator of a hometown donation website, has been holding events that give donors an opportunity to experience the appeal of the local communities they support, as well as the return gifts those communities offer. In one recent initiative, the company focused on saunas, a growing hobby in Japan. For a limited time, Satofull sold craft beers and other beverages from across the country–items available as return gifts to donors–at Takanawa Saunas, a sauna facility in central Tokyo. The products were selected as refreshments well suited to enjoying after a sauna session. The event was well received by facility users. One user said it “sparked an interest in beers from various regions,” while another remarked that it “served as a useful reference for choosing return gifts.” “We would be pleased if hobby-themed events like this help people discover the attractive thank-you gifts offered by local communities,” an official involved in the event said. Satofull has also organized an event tied to seasonal needs. During the spring school break, when demand for milk declines because school lunches are not served, the company held a cooking class in central Tokyo using milk offered as a return gift. At the class, eight parent-child groups learned about milk and dairy farming from producers, then made milk curry “udon” noodles and strawberry milk pudding. Parents who took part said the event was “a good opportunity for food education” and that they “would like to try making the dishes at home.” What to Support At Trustbank Inc., a Tokyo-based company that operates hometown donation portal Furusato Choice, an official said the regulation of reward points has “made it easier for donors to make decisions not only on the basis of ‘good deals’ (from return gifts), but also from the perspective of what they want to support.” The company has been encouraging donations based on the concept of a “related population,” focusing on people who maintain ties with communities other than the ones in which they live. One example is a fundraising campaign on Furusato Choice to help finance a new arena under consideration by the professional basketball team Utsunomiya Brex. The campaign drew about 87 million yen in donations from fans and other supporters between December 2025 and March 2026, far exceeding its 40-million-yen target. “It’s important to nurture circles of support connected by interest and empathy,” the official said. END [Copyright The Jiji Press, Ltd.]