Goodwill donations made in support of regional revitalization -- it is necessary to return to the original purpose of the furusato nozei system.
Internal Affairs and Communications Minister Seiko Noda has expressed her intention to reconsider the tax deductible donation scheme. Under the new policy, local governments that collect donations through excessive return gifts will be removed from the list of those covered by the system. She said a bill aimed at revising the Local Tax Law will be submitted to an ordinary Diet session in 2019, with a view to applying legislative changes to the system as early as in April that year.
The system stipulates that if one has made a donation to a specific local government of one's choice, an amount close to the sum of the donation can be deducted from one's income or residential taxes. This is virtually the same as paying part of one's taxes to the local governments of one's choice.
The system was initially intended to help people who hail from provincial areas to fulfill their wish to contribute to their hometowns. It is regrettable that some local governments have taken to collecting donations by advertising luxury goods as return gifts.
On two occasions, the minister has sent local governments a notice urging them to refrain from offering excessive return gifts. But many have refused to abide by the request.
As a reason for reconsidering the system, Noda explained, "It cannot be expected that such a request by itself would be enough for them [local governments] to voluntarily reconsider their stance." Although her wish to break down the present situation is understandable, is it truly appropriate to impose such legal restrictions? It is important to calmly discuss the matter.
True generosity needed
The cases the ministry excludes from the system are ones in which return gifts are priced at more than 30 percent of the amount of donations, or in which such presents are other than locally produced products. The ministry has judged that, as of Sept. 1, there were 380 local governments, or 20 percent of the total, offering return gifts that are excluded from the system.
Lists of return presents shown on websites specializing in arranging for donors to apply for the system and to complete necessary payments includes high-grade wagyu beef and imported bottles of wine, neither of which are items connected with the local communities to which donations have been made. It is a fact that such websites have played a role in spreading the system. However, there seems to be some excess in this respect.
Some local governments have argued against the ministry about return gifts the ministry considers to be items not covered by the system, saying these goods are "connected" to their communities. The ministry must draw a line between individual goods that will be judged to be appropriate or not as return gifts, so such a distinction can be clearly shown.
Certainly, furusato nozei donations must be desperately wanted by local governments facing financial difficulties. Some people who use the system, looking forward to return gifts, seem to be dissatisfied with the ministry's reconsideration of the scheme.
Furusato nozei is essentially preferential tax treatment for donations. The current situation -- in which local governments to which donations have been made cover large expenditures to buy return gifts -- cannot be described as wholesome.
Tokyo's Bunkyo Ward office includes "kodomo takushoku" -- the delivery of meals to financially distressed families with children -- in the list of programs covered by the furusato nozei system. Despite offering no return gifts, the ward office collected 82 million yen in donations last fiscal year, more than four times greater than its target figure.
People acting out of sympathy with slow but steady efforts made in local communities -- it is hoped that such a cultural climate for making donations will take root.
(From The Yomiuri Shimbun, Sept. 18, 2018)
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