Golf is the only game in Japan that is taxed. Every time a golfer in Japan tees off, he or she pays an average of 800 yen in “golf course usage tax” to the prefectural government. This is in addition to the national 5 percent consumption tax.
Not surprisingly, golfers have long complained that penalizing them alone is blatantly unfair.
According to the General Affairs Ministry, however, golfers are singled out because they benefit from the public services and infrastructure that local authorities provide to golf courses — such as access roads, waste disposal systems and environmental protection measures.
In addition, a ministry spokesman said the government regards golfers as having the “financial capability” to pay tax, “since they can pay for a game that costs a lot of money to play.”
And pay they do — through the nose. The ministry estimates the take from this tax for the fiscal year ending March 31 will be a whopping 74.7 billion yen.
Prefectures pass on 70 percent of the tax income to the municipalities in which the courses are located. For some small towns with no other industries, this golf levy, which they are free to use as they like, accounts for almost 30 percent of their total revenue.
What now appears to be a financial burden unique to golfers actually dates back to 1954, when they — along with the users of amusement facilities, such as pachinko parlors and bowling alleys — became liable to pay a “recreational facility usage tax.” That was abolished in April 1989 with the introduction of the consumption tax, but golfers were deemed such an important source of municipal revenue that the current tax targeting them alone was introduced.
The Japan Golf Association and other golf-related groups have criticized the government for taxing sports at all, and then for singling out golf. They have long lobbied for abolition of the golf course usage tax. Golf, they maintain, is a sport many Japanese play — not just the more affluent. They also emphasize that rather than relying on municipal services, most courses now make their own arrangements by, for example, contracting private waste-disposal firms and providing their own environmental protection measures.
In 1998, the JGA initiated a signature campaign, which collected 8.4 million names protesting against the unfair tax. The campaign paid off. From April, certain groups of players will no longer have to pay the tax — namely the under-18s; over-18s playing golf in physical education classes; the over-70s; the disabled; and those participating in National Athletic Meets. According to the government, this tax amendment is an effort to provide more opportunity for these groups to participate in the sport, although it will likely cut the tax take by around 10 percent.
The recent move has been welcomed by the golf industry, while provoking resistance from the 1,351 municipalities who benefit from the tax. Even though the shortfall will be made up in the form of additional allocations from the national government, municipalities fear they will no longer be able to use that money at their own discretion.
While the tax tussle between golfers and local governments continues, the issue can only be resolved satisfactorily by rethinking the taxation system . . . and waiting for the national economy to recover.