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The total amount of money collected under the Furusato Nozei During the fiscal year 2018, the original city tax donation program has increased by some 40% over the previous year to reach 5.12 billion yen, reaching a record for the sixth year in a row, announced Friday the Ministry of the Interior.
Growth was apparently the strongest in terms of amount, with some local governments collecting huge amounts of donations by offering generous gifts.
The combined amount of donations collected by four municipalities excluded from a new donations system launched in June represents more than 20% of the total amount for the 2018 fiscal year, closed in March.
In the system, people can donate to local governments of their choice, which need not be their home town. In return, donations less ¥ 2,000 are deducted from their income taxes and housing taxes.
After some municipalities competed to increase the amount of donations received by offering expensive return gifts, the ministry decided to limit these gifts to local products by 30% of the value of donations and to exclude the local administrations of the system if they did not respect the rule.
At the request of the ministry, most municipalities reviewed their gifts last November. But the ministry ruled out the four municipalities that did not respect the rules.
One of the municipalities was the city of Izumisano in Osaka Prefecture.
In fiscal year 2018, the city collected 49.7 billion yen, the highest amount of local government, after offering gift cards that can be used on the Amazon Japan online shopping site. GK, as well as gifts to give back.
The three other non-compliant municipalities follow Izumisano on the list of highest paid people.
The city of Oyama, in Shizuoka Prefecture, ranked second with 25 billion yen, followed by Koya City in Wakayama Prefecture with 19.6 billion and Miyaki City in Saga Prefecture with 16.8 billion.
The ministry also said that residential tax revenue in fiscal year 2019 decreased by 326.4 billion yen over one year due to donations under the city-of-residence system, led by major cities with many donors. The magnitude of the decline has increased by 30% over the previous year.
By municipality, Yokohama recorded the largest decline, with 13.6 billion yen, followed by Nagoya with 8.09 billion and the city of Osaka with 7.4 billion.
Tax revenues decreased by 5.6 billion yen in Kawasaki and 5.3 billion yen in the Setagaya district of Tokyo.
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