Ministry of Internal Affairs and Communications considers abolishing hometown tax payment system Seiichiro Murakami also supports the idea

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The future of hometown tax payment is becoming more and more uncertain. If you donate to a local government you want to support, the local resident tax you pay to the local government where you live will be reduced.
The system allows tax deductions and the recipient to receive a gift in return, but the Ministry of Internal Affairs and Communications and other bureaucrats are leading a strong movement to review it.
The number of users is increasing because people can receive anything they want, from food to home appliances. The total amount of donations in fiscal 2023 is set to exceed 1 trillion yen, the highest ever.
Many of the gifts given in return are everyday items, and they have become a common way for ordinary people to save on taxes. They have become widespread because people can choose where to pay their taxes.
There was a strong view among central government agencies that this infringed on the "right to collect taxes" that had previously been held by bureaucrats, and dissatisfaction was growing.

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Themis March 2025 issue
https://imepic.jp/20250316/409070

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Everyone's comments

• Hometown tax donations and the World Expo are causing rice shortages and rising rice prices, so both should be abolished.
• I'll play, 🐷
• With the hometown tax system, salaried workers have started filing tax returns... but there are many people who should file, so tax revenue will decrease.
• Agreed 🙆
• It's really over
• The amount of money we can absorb will decrease.
• Maybe it's because I made a lot of money 🐣
• I'm scared that the current Liberal Democratic Party would say something like, "We have to continue the hometown tax system! In light of our diverse society, and with the increase in foreigners, we should expand the scope of hometowns to include other countries! It will also be possible to pay taxes to China, Korea, etc." I'm pretty serious about that.
• If the people in the Ishiba administration say so, then the opposite must be correct. The pattern that the opposite of what the Asahi Shimbun and leftists say is correct applies perfectly to the Ishiba administration. I wonder why.
• Hold on a second
• Get rid of it together with the gel.
• Huh??? lol
• If you show them the mirror, won't they just shed all that oil?
• Please allow taxpayers to choose how all their taxes are spent. I don't pay taxes for the budgets of the Gender Equality Agency or the Child and Family Agency, and I have no intention of paying taxes to support the welfare of foreigners.
• You're late in realizing this!! ️!! ️!!
• With hometown tax, you can choose where to pay your taxes of your own free will, and you can pay your taxes directly to the local government. The government doesn't like that, and wants to control the taxes of its citizens, so they're just saying they want to abolish it. Also, regarding hometown tax, local governments that don't want the system to be changed have sued the Ministry of Internal Affairs and Communications, and the Supreme Court has ruled in their favor. So why are we still saying this now?
• It's an effective measure to eliminate the disparity in tax revenue between rural and urban areas, but perhaps they're just hoping for urban voters?
• Apparently, hometown tax donations are reducing tax revenues for local governments that have anti-Japanese policies. The current anti-Japanese LDP-Komeito government probably wants to expand these anti-Japanese policies.
• Hometown tax should be abolished. It was a strange way of paying taxes.
• Please abolish taxes.
• We don't need hometown tax donations that require gifts in return. Instead, I think it would be better to have tax donations that can be used to improve the quality of school lunches or for other specific purposes. Of course, without the 2000 yen self-payment.
• Is it because prefectures that offer kimchi as a return gift pay less tax?
• Murakami has no political reasons. It's simply a policy that was started under the Abe administration. He harbored negative feelings such as hostility, hatred and a desire for revenge towards those in power. He was unable to take any action to resolve these feelings, so he hung out with his friends and drank and ate excessively. This, combined with his own feelings of powerlessness, created a pathological situation. He was blessed with an opportunity to vent his repressed feelings. The problem is that there were no political reasons.
• After censoring speech, the next step is to abolish hometown tax payments. They're really quick to say things like that.

JapanNewsNavi Editorial Department A's Opinion

The future of hometown tax donations is unclear. This is due to reports that the Ministry of Internal Affairs and Communications is reviewing the system and may even consider abolishing it. Hometown tax donations are a system where people can make donations to local governments they want to support, and receive a deduction on the resident tax they pay to the local government where they live, as well as receive a gift in return. Since its introduction in 2008, the number of users has been increasing year by year, with the total donation amount for fiscal year 2023 reaching a record high of over 1 trillion yen.

I believe that there are certain benefits to the hometown tax system. Being able to choose where you pay your taxes and support local governments is meaningful from the perspective of regional revitalization. Also, because people can receive gifts in return for a net fee of 2000 yen, it is true that it has become established as a "good deal" for many citizens. However, looking at the latest move by the Ministry of Internal Affairs and Communications, it seems that the government has a strong desire to push ahead with a fundamental review of the system.

In considering this issue, we must first clarify the current state of hometown tax donations. Hometown tax donations were originally intended to revitalize local areas and correct disparities in tax revenues between local governments. However, in reality, competition over return gifts has intensified, leading to a series of problems over excessive campaigns by local governments and expensive return gifts. As a result, the Ministry of Internal Affairs and Communications has reviewed the system and strengthened regulations on the content and proportion of return gifts.

A particular problem is the "decrease in tax revenues for urban municipalities." By using hometown tax, tax revenues that would normally be paid to the municipality where one lives as resident tax are diverted to other municipalities. This has caused a serious problem of declining tax revenues in urban areas, and there are cases where it is difficult to maintain administrative services.

On the other hand, hometown tax donations are a valuable source of revenue for local governments. In particular, in areas with declining population, it is difficult to maintain finances through business attraction and tourism revenue alone, and hometown tax donations play a major role. For this reason, if the system were to be abolished, many local governments would be greatly affected by the financial situation.

Considering that hometown tax donations have been effective to a certain extent as a means of "regional revitalization," I believe that the system should not be abolished completely, but rather reviewed in the direction of optimizing it. For example, the following improvement measures are possible.

1. Optimization of return gifts
   　Currently, there is fierce competition between local governments over which gifts to offer, and there are cases where the system is being used for purposes other than its original intent, such as home appliances and luxury food. Shouldn't we restore the original meaning of "donations" by strictly enforcing rules such as limiting gifts to "local products" and curbing excessive competition?
2. Introduction of a mechanism for balancing tax revenues
   　The decline in tax revenues for urban municipalities has been seen as a problem, but in order to mitigate the impact, one idea is to consider a system in which a portion of the hometown tax donation amount is returned to the municipality from which it was made. This would make it possible to transfer financial resources to rural areas while limiting the decline in tax revenues in urban areas to some extent.
3. Improved transparency
   　It has been pointed out that some local governments are not transparent about how donations are being used. It is important to clearly indicate how hometown tax donations are being used and ensure that funds are being used in a way that donors can understand.

We must not forget the original purpose of hometown tax. It was originally created as a system to transfer financial resources to local areas and to allow taxpayers to support local governments of their own volition. If it were to be completely abolished, not only would local governments' finances suddenly become tighter, but taxpayers' freedom of choice would also be taken away.

However, looking at the actions of the Ministry of Internal Affairs and Communications, some people are of the opinion that "Hometown Tax Infringes on the bureaucrats' right to collect taxes." It can be surmised that this is due to the government's desire to control the flow of tax payments centrally in its financial management. If this is really the case, it would mean that the convenience of bureaucrats is being prioritized over the will of the people, which is extremely problematic.

I believe that any review of the hometown tax system requires careful discussion. I support correcting the system's shortcomings and moving forward with streamlining, but hasty abolition could result in significant losses for local governments and taxpayers. If the government is truly thinking about the interests of its citizens, it should carefully consider the significance of hometown tax and then proceed with appropriate reforms.

We will be closely watching the government's actions to see what the future holds for hometown tax donations.

Written by: Editorial Department A