Internal affairs minister Sanae Takaichi said Friday that her ministry will allow the city of Izumisano, Osaka Prefecture, and two other municipalities to join the new furusato nōzei (hometown tax donation) system.
The decision came after the Supreme Court on Tuesday overturned a lower court ruling and revoked the government’s decision to exclude Izumisano from the revamped donation system due to its offering of expensive return gifts to donors.
The other two — the towns of Koya, Wakayama Prefecture, and Miyaki in Saga, had likewise been excluded from the system. The ministry notified the three municipalities of its decision on Friday.
People who made or will make donations to the three municipalities between June 2019, when the revamped system started, and the end of this September will be able to enjoy tax breaks in return.
The decision is set to be published in official gazettes as early as Tuesday.
The system allows taxpayers to make donations to local governments of their choice and receive tax cuts and gifts in return.
The ministry had also excluded the town of Oyama in Shizuoka Prefecture, but the ministry will take separate procedures to let it join the system because it was excluded for reasons different from those used on the other three municipalities,
“I’m taking the (Supreme Court’s) ruling seriously,” Takaichi told a news conference. “We’ll make sure to conduct studies from a wider variety of perspectives when we draw up a system that involves municipalities in the future.”
The minister said she has told Buichiro Kuroda, her vice internal affairs minister, to take necessary action.
The tax donation system was renewed in June last year, giving the ministry discretionary power to choose the municipalities to be included in the system.
The ministry will maintain criteria clarifying that any gifts to be sent in return for donations need to be locally produced goods with a value not exceeding 30 percent of the amount donated.
But the ministry will scrap a standard for participation in the system based on donation-gathering methods municipalities were using before the new system debuted because the Supreme Court ruled that the use of such a standard to exclude certain municipalities was problematic.