The total amount of money collected under the furusato nozei hometown donation system in fiscal 2019 totaled ¥487.5 billion, down from some ¥512.7 billion in the preceding year, Jiji Press learned Tuesday.
The furusato nozei system allows people to make donations to local governments of their choice and receive tax cuts in return. Many of the recipient governments give gifts to such donors.
The amount of donations hit a record high for six straight years until fiscal 2018.
The decline in fiscal 2019 apparently reflected the introduction in June last year of a new system that limits such gifts to local products worth up to 30 percent of the value of donations. The new furusato nozei system is aimed at controlling the competition among local governments to collect donations by offering lavish return gifts.
In fiscal 2019, the city of Izumisano, Osaka Prefecture, took in the largest amount in donations, totaling ¥18.5 billion, which was collected under the old system, informed sources said.
The new donation system initially excluded Izumisano and some other municipalities that offered expensive gifts under the old system.
Izumisano is now included in the new system after the Supreme Court in June this year revoked the internal affairs ministry’s decision to exclude it.
Ahead of the start of the new system, Izumisano attracted massive donations in April and May 2019 under the old system by adding gift coupons from Amazon.com to its gift opitons.
Under the furusato nozei system, the amounts of donations minus ¥2,000 are deducted from donors’ residential tax, causing tax revenue to fall mainly at large cities.