a tax deduction and gifts to encourage donations

After the New Year’s earthquake that hit the Japanese archipelago, many Japanese made donations to relief efforts and evacuees through a tax rebate system and, often, received gifts.

Two weeks after the last major earthquake which hit western Japan, on January 1, 2024, rescuers are still at work searching through destroyed houses. They have already identified nearly 230 victims. The government is mobilizing to help families who have lost everything and many citizens are also mobilizing by making donations.

There has been a very original tax deduction system in Japan for years called “furusato nozei”, which translates into French as “tax in the native country”. Originally, this system was created to help regions or rural communities which are suffering greatly from demographic collapse. These municipalities have fewer and fewer inhabitants, therefore fewer and fewer taxpayers and welcome fewer and fewer businesses. As a result, each year they have less and less tax revenue to run their public services.

It is to provide them with some additional income that the State has implemented a sort of voluntary redistribution. The operation is quite simple, cities in difficulty register on a platform controlled by the government and can then receive donations from residents of cities deemed wealthier. If you live in Tokyo, for example, you can decide to make a donation to your parents’ village or to a mountain town with which you have no connection. And this donation is fully deductible from your taxes.

A gift system to encourage donations

To motivate residents of wealthy areas to make these donations, the rural area that received the donation will offer a gift to the generous taxpayer. On the website that manages this system, people often even choose the destination of their donation based on the gifts offered. You even have a drop-down menu like on a shopping site. Among the gifts, we find a lot of food, boxes of peaches from Aomori, crab claws from Hokkaido and enormous wagyu steaks. But gifts can also correspond to experiences. This could be a day with a fire brigade, three hours on a racing circuit or ski passes for the whole family.

To help the victims of the January 1 earthquake, thousands of people are currently directing their donations to areas that were very hard hit by the disaster. And they don’t necessarily expect a gift in return. As the administrations of several cities are also completely disorganized, other town halls have also agreed to manage, for them, these special tax donations made to the affected areas. They will collect the money and transfer it so that it is quickly available in the destroyed communities. You can also now make a donation to the civil security forces, who are intervening on site at the moment. And there you will have a gift in addition to the tax deduction, it will be liters of orange juice or traditional porcelain services.