On Sept. 11, then-Internal Affairs and Communications Minister Seiko Noda gave a news conference at which she stated the government's intention to revise laws for local taxes.
The ministry, which regulates taxation at the prefectural and municipal levels, is trying to rein in the furusato nōzei (hometown tax donation) system, which it claims many local governments abuse. Launched in 2008, the system allows taxpayers to donate money to local governments in areas where they do not live and in turn receive residence tax (jūminzei) cuts as a result.
The ministry's original intention was to help local governments strapped for money due to depopulation and other factors by appealing to city dwellers' feelings for the places where they grew up, thus the "furusato" (hometown) appellation. The bulk of local tax payments are collected by populous cities and prefectures, like Tokyo, Osaka and Kanagawa, where many residents were born elsewhere.