FURUSATO NOUZEI, Local tax payment to your favorite town

Originally, you can not choice where you pay to your local tax. It is prescribed by the Local tax act to pay it to the government which has the jurisdiction over your residence.
However, under the new system, Furusato Nouzei system, you can get the similar effect to some extent. You can pay a certain proportion of your local tax amount to a town you like.
Furusato Nouzei means "tax payment to your home town" if literally translated. However, it should be called formally "Furusato Donation". It is one of the preferencial treatments on taxation for donations. The detais is rather complex. For example, if you make a donation of 10 thousands yen to a local public body ( a Prefecture or a Municipality ), you can receive a benefit corresponding to the donation amount by decreasing tax burden. The total of Your income tax amount, which means the total of the National income tax and the Local income tax, shall be decreased by the corresponding amount. Here, this corresponding amount shall be calclulated by subtracting 2 thousands yen from your donation amount. So, in the case mentioned above, your tax burden shall be decreased by 8 thousands yen.
Please note the limitation amount is set for this treatment. Although it is also complex and difficult to understand, you can foughly regard 20% of your local tax amount or 2% of your taxable income as the limitation amount to enjoy the Furusato Nouzei preferential treatment fully. When the donation amount is within this limit, your final burden, the real donation amount, goes up to no more than 2 thousands yen.

〔In Japanese〕

しかし、新しい制度である ふるさと納税制度 によることで、同様の効果を得ることができます。貴方の住民税の一定割合を、好きな町に納付することができるのです。
”ふるさと納税” といっても、文字通り、税金の納付先を選べるわけではなく、厳密には、”ふるさと寄付金”と呼ぶほうがよいでしょう。この制度は、寄付金に関する優遇税制の一種です。その詳細はかなり複雑ですが、たとえば、貴方がどこかの地方公共団体(都道府県あるいは区市町村)に1万円の寄付をしたときに、これに応じた額の利益を、その税負担を圧縮させるという方法で享受することができるのです。つまり、所得税(国税)と住民税との合計額が、寄付をした金額に応じて減額されるということです。ここで減額される税額は、寄付をした額から2千円を差し引いた額となります。よって、この例では、税負担額が8千円減少することになります。

Gift in return for Tax ?

Furusato Nouzei system was introduced several years ago. It has become very popular and gained a foodhold in a short time. The reason is not because you can assist your hometown or another favorite town with thie system, but because you can get various cuisines, indigenous products or other gifts from the public body you give your donation to.
There is no issues for a public body to offer a return gift for donations. However, when we consider how the Furusato Nouzei system works, as I tell in the preceding chapter, it bring up a worrisome issue. Is it reasonable and justified to give a return gift for tax payment? Actually, the National government indicates these return gift shouldl not be too gorgeous. It also indicates local bodies should offer products or services characteristic of the districts. Local bodies want to attract donations as much as possible. The competition amont them can go too overheated, at the sacrifice of the original tax amount to be paid at the residencial address.

Anyway, if you can get various things for the 2 thousands yen donation, the merit is large. I recommend you to take advantege of this system and to find attractions of Japan.

〔In Japanese〕

地方公共団体が、受けた寄付に返礼をすることには問題はありません。しかし、前章で説明したような、このふるさと納税制度の仕組みを考えると、なかなか厄介な問題が生じてきます。税金に対して、その対価となる物品を交付することは正当化できるのでしょうか? 実際のところ、国からは、返礼品は高額になりすぎるべきでないという示唆がなされていますし、また、その内容も各地の特産品によるべきだとされています。各地方団体は、なるべく多くの寄付を集めたいと思っていて、本来、その住所地で納められるはずだった税額を削りながらの競争が過熱する恐れがあるのです。


By the way

I have made donations to Gotsu city, many years in a row. I got the following wonderful presents from Gotsu.I also have got Pig meet, Pottery cups, and other goods before.

〔In Japanese〕