February 03, 2023
In Japan, many people from rural areas move to Tokyo and other cities for higher education or employment. Therefore, the Furusato, or Hometown tax system was created to allow people from rural areas who currently live in the cities to pay taxes to the area where they grew up if they prefer. Although the word "tax" is used, it is actually a "donation" to prefectures, cities, wards, towns, and villages. Generally, when you donate to a municipality, a part of the donation amount is deducted from your income tax and inhabitant tax. Although the Furusato tax payment system was established as "a system to contribute to the hometown where you were born and raised," residents can pay the Furusato tax to any municipality they choose. The payment system allows you to check the usage of your donation online, and you can select the municipality you wish to support. In particular, some municipalities allow the taxpayer to choose the use of the donated funds. Each municipality can also consider what uses are necessary for the area and let the taxpayer choose. More recently, municipalities that provide taxpayers with local specialties as a "return gift" have become very popular, allowing the taxpayer to enjoy local delicacies such as meat, fish, vegetables, fruits, and so on. The program is not limited to citizens, anyone who earns a salary and pay income and residence taxes to the Japanese government can also enjoy the benefits of Hometown Tax Program.