The government is introducing a tax that will finance efforts to manage and conserve abandoned forests across the country. Proper management of forests contributes to the fight against climate change since they absorb the heat-trapping carbon dioxide. Conservation of forests helps prevent natural disasters since they preserve headwaters and mitigate mudslides. Efforts to promote adequate management of forests, which account for a majority of Japan's national land, make sense. The question is how effective the planned tax scheme will be to achieve that.
The fiscal 2018 tax reform outline, adopted by Prime Minister Shinzo Abe's ruling coalition, calls for introduction of the new levy, called the forest environment tax, beginning in fiscal 2024. It will be imposed in the form of a uniform ¥1,000 annual surcharge on the individual residential tax currently paid by roughly 60 million people nationwide. The national government, which will collect and distribute the incoming revenue to prefectures and municipalities, expects the total revenue to reach some ¥60 billion a year.
One problem with the planned scheme is that the amount distributed to individual local governments will be small, raising doubts as to how helpful the money will be for each municipality to fund its forestry management efforts. The initial plan was to distribute the revenue among only a limited number of municipalities chosen on the basis of privately owned forestry space in their respective areas, but in the end it was decided that the revenue would be provided to all prefectures and municipalities — apparently to avoid incurring criticism from those in urban areas. As a result, the tax revenue will be divided among more than 1,750 prefectures and municipalities.