How to use the Furusato Nozei Donation System

How to use the Furusato Nozei Donation System
Photo Credit To The Ibaraki Shimbun

From the left: Honorary Consul Mr. Nobuchika Ihara, PNG Ambassador H.E. Mr. Gabriel Dusava,
Mr. Uruno, Managing Director of Southern Coffee; Mr. Jimenji, President of Chimoto Coffee.

The furusato nozei or “hometown tax” donation system is a way for individuals to donate to local governments. For the past few years, this subject has been heavily discussed on television, but how the furusato nozei system actually works has not been very clear. This article will touch on the basics of the furusato nozei system and the advantages it may have for both local governments and international businesses.


Background

Originally proposed in 2007 and started in the fiscal year of 2008, the concept of furusato (hometown) tax is that taxpayers will assist in the revitalization of the rural districts by contributing funds to supplement the districts’ decreasing tax revenues. People can select any participating local government that they would like to support and donate to. Through this donation, donors are eligible for tax deductions from their income and inhabitant tax if they fill out a tax return form at the end of the fiscal year. Donors can donate to specific causes or areas, such as to the earthquake stricken areas, or donate to receive the “gifts” provided by the rural governments, usually a specialty item from their hometown, which are a token of the local government’s gratitude.

Donors can donate to specific causes or areas, such as to the earthquake stricken areas, or donate to receive the “gifts” provided by the rural governments, usually a specialty item from their hometown, which are a token of the local government’s gratitude.

How popular is the Furusato Nozei?

Since it’s launch in 2008, the hometown tax system has been popular. According to statistics from the Ministry of Internal Affairs and Communications, the number of donors was 33,149 in 2008 and 435,720 in 2014. The amount of money donated in 2008 was 7.3 billion yen, but almost doubled to about 34.1 billion yen in 2014.

The reasons for its popularity is not only because of the tax credit received from the income tax and inhabitant tax, but also the various local gifts that can be obtained, such as produce from the region, special services, or discount coupons that can be used at that region’s facilities. Thus, local governments try to come up with various ideas to attract more donations. A few examples of unusual gifts are live animals, such as Japanese rice fish (medaka) and Japanese stag beetles.

The relationship between Bando City and Papua New Guinea began when the city donated two fire trucks and one ambulance to Papua New Guinea in August 2013.

In the case of Bando City in Ibaraki Prefecture, the government has produced and started to give Papua New Guinea Highland Coffee as a furusato nozei gift. Papua New Guinea Highland Coffee is made of the finest Arabica coffee from the highlands of Papua New Guinea. The coffee is distributed with the cooperation of the Japanese coffee company, Chimoto Coffee, and Southern Coffee. The relationship between Bando City and Papua New Guinea began when the city donated two fire trucks and one ambulance to Papua New Guinea in August 2013. Prime Minister O’Neill later suggested to the Bando City mayor, Mr. Yoshihara, to sign a sister city agreement during his visit to Japan. In July 2014, Honorary Consul Nobuchika Ihara and a delegation of Bando City officials went to Tari City for the sister city signing ceremony. To continue its support of its sister city, Bando City decided to produce this gift with the approval of the Papua New Guinea Embassy, to spread the word of Papua New Guinea’s specialty coffee.

If there is a city that has relations with a local Japanese government, regional products from that country could be proposed to the local government as a new twist to their furusato nozei gift. This would be beneficial for both parties, as it would become a new promotional idea for the local government and at the same time assist in promoting products.

For more information, please visit:
Ministry of Internal Affairs and Communications: www.soumu.go.jp
Bando City PNG Highland Coffee: www.city.bando.lg.jp


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