The furusato nōzei is a system in Japan that allows taxpayers who live in urban areas to contribute to rural areas in return for a tax credit from income tax and residence tax. Its creation was announced by the Minister for Internal Affairs and Communications Yoshihide Suga under Prime Minister Shinzo Abe in 2007.
The local headquarters was established to help increase the number of children, especially in rural areas, and to promote the development of self-governing bodies. Promoting “hometown tax” is included in these activities.[”Suga chief cabinet secretary express the intention of the establish the preparatory office for the headquarters of local creation at the middle of this month. (2014, July 5). Sankei News Retrieved: http://sankei.jp.msn.com/politics/news/140705/plc14070520480026-n1.htm July]
History
In the spring of 2008 the "Hometown tax" law was legislated in Japan.
[Home tax start. (2008, May 16). Shinnwakaikei group Retrieved: http://sinwagroup.jp/tax/tax-qa/qa-new-tax-system/post352.html July.]
Function
Taxpayers who contribute more than 2,000 yen can have their income tax and residence tax reduced. The amount deducted is the taxpayer's entire contribution minus 2,000 yen and set amount. To receive the subtraction, the taxpayer files a final tax return.
[about home tax. (2014). sōmusyō the Ministry of Public Management Retrieved: http://www.soumu.go.jp/main_content/000254924.pdf July.] The reasoning is that many young people move to urban areas, leaving fewer people to pay rural taxes. Taxpayers choose the receiving jurisdiction.
[How do we think about home tax. (2007, June 19). Nihonn nōgyō Shimbun Japanese Agriculture Newspaper Retrieved: http://www.pref.fukui.jp/doc/kenmin/chijipublication/190619nihonnougyousinbun.html July]
Evaluations
Cities that offered "gifts" of local products received up to 60 million yen.
[Tuna, Beef…local special products make “Home Tax” much increased. (2014, May 6). MSN Economy News Retrieved: http://sankei.jp.msn.com/economy/news/140506/biz14050609550005-n1.htm June.]
The use of gifts has been criticized as distorting the results: for example, an effective donation of just 2,000 yen can net the donor 60 kg of rice, equivalent to one adult's annual consumption.
Cities that have no specialty products or have no means to announce their activity received fewer contributions.[At ōyamazaki city, only 4 “home tax” was used. (2014, May 27). Kyōto shimbun Newspaper Retrieved: http://headlines.yahoo.co.jp/hl?a=20140527-00000007-kyt-126 May]
Yamagata prefecture
In Yamagata Prefecture, contributions have been increasing. For example, Obanazawa city and Mogami town received several million yen in 2013. They use gifts and the Internet to collect contributions. For example, Obanazawa, Yamagata offered gifts of “Obanazawa watermelon” and “sirloin steak of Obanazawa-gyū”.
[At Yamagata prefecture, “home tax” rapidly inzrease because “return presents are luxury” and “formalities became easy”. (2014, May 18). yamagata shimbun Newspaper Retrieved: http://headlines.yahoo.co.jp/hl?a=20140518-00000341-yamagata-106 May.]
