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The story
In fiscal year 2025, Tokyo and 18 other prefectures saw tax revenue outflows exceed what they took in through Japan’s “hometown tax” donation program (furusato nozei), with total losses topping ¥260 billion. On 5ch, the discussion split between users questioning a system that bleeds money through intermediary fees, and those defending it as working exactly as intended — shifting tax revenue from cities to rural areas.
Hometown Tax Donations: 19 Prefectures in the Red — Tokyo’s Losses Hit ¥225.5 Billion in FY2025
An independent calculation of FY2025 hometown tax donation figures — receipts minus the cost of reward gifts and the tax deductions residents claim — found that 19 prefectures saw more revenue flow out than in, putting them in the red. Tokyo’s shortfall alone reached ¥225.5 billion. The outflow, concentrated in urban areas, has once again exposed the strains built into the system.
Source: asahi.com / Original article here
What people said
They're already busy enough — having to handle all this paperwork on top of it, I actually feel bad for them.
Public servants are basically slaves, so who cares.
Isn't the whole country ending up in the negative too though?
So we're spending ¥260 billion just to redistribute money to rural areas…?
There's a cap on how much you can donate, sure, but everyone living in Tokyo is piling into hometown tax donations to send money to rural areas — of course the cities end up in the red.
I mean, that's literally the point of the system.
Well, it's basically a government-sanctioned skimming system that ordinary citizens get to participate in.
It's the ultimate "dumb it down for the masses" policy.
Exactly. It just talks a good game on the surface — what's actually happening is pure vested interests.
By that logic, shouldn't it all net out to zero overall?
I mean, you can still make the donation itself, right?
The deficit's from the portal sites' fees — isn't this a system that was never going to turn a profit in the first place?
That's exactly one of the points people criticize it for.
Whoever started that needs to answer for it.
Well, but without the gifts, who'd even bother using it? There's that too.
That's roughly how much tax revenue just evaporates.
As long as that money becomes income for those companies, isn't that fine?
If you can say that about every middleman skimming a cut, then sure, I guess it's fine.
Well, that money does end up as someone's income too, in the end.
Roughly 20% of hometown tax donations go straight to companies as site operating costs.
Amazon's jumped in on this too now — money that should be going to the government as tax revenue is instead flowing out to foreign companies. However you slice it, that's a net loss for the country.
If something benefits you, it's best not to overthink it and just use it.
Our elected representatives have kept this system running for years, so I guess that's the will of the people.
That was the whole point to begin with — this system was created by Yoshihide Suga back when he was Minister of Internal Affairs. The "hometown" in the name, and all that talk about "giving back to the hometown you moved away from," is just window dressing.
You're just paying it upfront instead, that's all.
Looked at nationally, it's simple:
– total tax revenue stays the same
– whatever gets spent on the reward gifts just becomes the deficit
That's literally all this is.
Re: #98
Oh look at you, thinking on a national scale. Good for you.
But honestly — rural areas are getting poorer and the government wants to help them out, except there's no budget for it. And you can't exactly just tell cities "hand over your tax money to the countryside." So in the end, isn't this whole hometown tax donation thing just a way to move money from cities to rural areas without anyone complaining?
Though people are starting to complain now anyway.
Then they should only let you donate to places you've actually lived, no?
Except, apparently, you can donate to places that aren't your hometown too.
Background and Key Points
Furusato nozei (“hometown tax”) is not actually restricted to your hometown: since its 2008 creation under then-Internal Affairs Minister Yoshihide Suga, any Japanese taxpayer can “donate” to any municipality nationwide, deduct nearly the full amount from next year’s resident and income tax (minus a fixed ¥2,000 co-pay), and receive a reward gift — local beef, seafood, sake, appliances — capped at 30% of the donation’s value. The intent was to let depopulating rural towns claw back tax revenue from people who grew up there but now live and pay taxes in Tokyo or other cities. The FY2025 figures behind this thread show 19 of Japan’s 47 prefectures now net negative once reward-gift costs and portal-site commissions (Rakuten, Furusato Choice and similar sites, reportedly around ¥130 billion nationally) are subtracted from donations received, with Tokyo’s shortfall alone at ¥225.5 billion and the nationwide total past ¥260 billion.
The thread doesn’t dispute those numbers; it splits on how to read them. One side treats the deficit as evidence of a broken system — a “sure win” for donors that somehow produces a national loss, with a large share of every donation going to private site operators rather than any government. The other insists the losses are the mechanism working as designed: cities were always meant to bleed revenue to rural areas, so Tokyo’s shortfall is success by definition, not failure.
Left unmentioned is a key asymmetry: Japan’s local allocation tax grants reimburse most municipalities for roughly 75% of what they lose to furusato nozei. Tokyo, as a wealthy non-recipient of those grants, gets none of that offset — meaning its headline loss is real and uncompensated, while most other prefectures’ true net losses are considerably smaller than the raw figures suggest.
*This article is compiled and summarized from the 5ch (Nanademo Jikkyo G) thread “[Major Bad News] Hometown Tax Donation Losses Top ¥260 Billion… Isn’t Everyone Just Ending Up Miserable Because of This System?”.
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