Government considering new tax for forest maintenance

JIJI

The government has stepped up discussions on a proposed new tax to boost financial resources for forest management and conservation, officials said.

The government is examining the option of raising the individual residential tax, a local levy, to distribute to municipalities in need.

A key problem is whether people in urban areas would accept a tax that would not benefit them.

Last month, the government set up a panel to discuss the proposed levy, tentatively called a forest environment tax, hoping to map out its basic outline as early as summer.

The government aims to include the levy in tax-system reform measures for fiscal 2018, the officials said. The measures will be drafted late this year.

Some 70 percent of Japan is covered in forest. But a lack of maintenance has left many of the country’s forest areas in poor condition.

In many cases, it has become difficult to identify forest owners after generations of inheritance. Furthermore, the forestry industry faces a chronic labor shortage, with the current workforce rapidly aging.

Forests play an important role in preserving headwaters and curbing mudslides. Such roles will be impaired if forests are left to deteriorate.

Improving the condition of forests also contributes to the fight against global warming because they absorb carbon dioxide.

Many municipalities have introduced their own taxes to procure funds for forest management and conservation. But rural areas are struggling to obtain the necessary revenues because of depopulation.

Essentially, the proposed tax “would be a system to redistribute money collected in cities to mountainous areas,” said an official from a major city government.

“The problem is how to win understanding” in urban areas, a Forestry Agency official said.

Another problem is that the proposed tax would cause double taxation in many municipalities.

As of late November last year, 37 of Japan’s 47 prefectures plus one major city had local taxes for forest and headwater preservation.

They collect between ¥300 and ¥1,200 annually from each resident. Some even charge companies.

Before introducing the proposed tax, the central government needs to solve this double taxation problem, which would require negotiating with local governments.