The amount of money collected under Japan’s furusato nōzei (hometown tax donation) system reached a record high for the third straight year in fiscal 2022, which ended in March, the internal affairs ministry said Tuesday.
The total rose by about 20% from the previous year to ¥965.4 billion, with all of the country’s 47 prefectures except for Hyogo logging increases.
The furusato nōzei system remained popular after people stepped up donations in hope of receiving gifts in return while they stayed home during the COVID-19 pandemic.
The city of Miyakonojo in Miyazaki Prefecture gathered the largest amount of donations, at ¥19.6 billion, followed by the cities of Monbetsu and Nemuro in the northernmost prefecture of Hokkaido, at ¥19.4 billion and ¥17.6 billion, respectively.
Under the furusato nōzei system, the value of the donation minus ¥2,000 is deducted from the donor’s residential and other taxes the following year. The total sum of residential tax deductions to be given in fiscal 2023 grew about 20% from the year before to ¥679.8 billion.
Yokohama posted the largest amount of deductions, at ¥27.2 billion. Nagoya came in second, at ¥15.9 billion, followed by the city of Osaka, at ¥14.9 billion.
Municipalities collecting donations under the system are prohibited from spending more than 50% of their value on related expenses such as costs to procuring and ship gifts in return.
The total amount spent on those expenses stood at ¥451.7 billion, or about 46.8% of the value of donations. Spending as a proportion of donations climbed 0.4 percentage point from the year before.