New platform encourages Japan's foreign residents to use tax donation programs

A new online platform launched Wednesday for non-Japanese taxpayers in the nation with the intention of getting more foreign residents to discover various regional attractions — both food and exclusive tours.

It aims to do this through the tax-deductible donation program known as furusato nōzei, which allows taxpayers to offer monetary donations to a prefecture, city, town or village of their choice outside of the one where they currently live. The donor then receives gifts from the recipient local government, often in the form of local products or culinary specialties.

The program is perennially popular among Japanese residents because donors get both gifts and tax deductions. However, very few websites associated with the program are offered in other languages and are generally unfriendly for non-Japanese residents, said Naomi Mano, who heads Luxurique, a Tokyo-based startup that rolled out what it claims to be the first multilingual platform for the program, called Furusato Japan.

“The furusato nо̄zei donation program was not reaching non-Japanese residents at all,” Mano said during a media event in Tokyo.

“I had more opportunities to communicate with foreign residents during the pandemic. While we talked about a variety of things, I asked them if they were using furusato nōzei. But most of them weren’t and didn’t even know about it,” Mano said.

Seeing the potential, Mano proposed to some major furusato nōzei platforms that they run multilingual versions of their sites together. They all turned her down, which prompted her to launch a platform of her own.

The Furusato Japan platform is partnered with four municipalities for now — Arita town in Saga Prefecture; Fuji, Shizuoka Prefecture; Ichinoseki, Iwate Prefecture; and the town of Kutchan in Hokkaido.

Furusato nōzei gifts for donors tend to be local specialties, but the Furusato Japan platform also plans to provide experience-based gifts, such as exclusive tours, so that Japan's foreign residents can discover more places in the country while supporting those localities at the same time.

Yoshiaki Matsuo, mayor of Arita, which is famous for its porcelain, also attended the launch even in Tokyo. “Our top priority is for foreign residents in Japan to know about our town," he said, "and then visit and experience our nature and culture beyond porcelain.”

Mano said attracting more non-Japanese taxpayers is important, since they could play the role of influencers, promoting more areas of Japan when they return to their home countries in the future.

If package tours prove popular as gifts, they may be offered to inbound tourists as well, Mano added.

For instance, for those who make a ¥750,000 ($5,180) donation, a tour will be offered that comes with backcountry snowboarding in Kutchan, a ski resort popular among foreign tourists. Up to five people will be led on a secret course by a professional snowboarder.

Japan is set to further ease border restrictions from Oct. 11, welcoming independent tourists, removing a daily entry cap and exempting visa requirements for 68 countries and regions.

As the relaxation of border restrictions will likely resuscitate inbound tourism, municipalities are eager to attract foreign travelers.

Furusato Japan has started with Japanese and English versions, and more languages will be ready from April. The website was launched Wednesday, but people can only make donations starting Saturday.

The furusato nōzei program was established in 2008 in an attempt to support prefectural governments and municipalities facing shrinking tax revenue due to depopulation.

The amount of annual donations have been increasing, with ¥830.2 billion being logged in the fiscal year through March, compared with ¥284.4 billion five years previously.

When someone makes a donation, the total amount — minus ¥2,000 — is deducted from the donor's income and residential taxes. The annual maximum deduction amount varies, depending on the donor’s income.