Japan's hometown tax donations hit record 1.33 trillion yen

Japan’s hometown tax donation system, known as Furusato Nozei, reached a record high in fiscal year 2025, with total donations amounting to 1.33 trillion yen. This represents a 4.6% increase from the previous year, marking the sixth consecutive year of record growth. The Ministry of Internal Affairs and Communications reported that the number of donations reached a record 59.63 million cases.

Izumisano City in Osaka Prefecture led the nation in donations, collecting 23.039 billion yen. Other top recipients included Shiranuka Town in Hokkaido and Miyakonojo City in Miyazaki Prefecture. Conversely, cities like Yokohama and Nagoya saw the highest outflows of tax revenue due to resident tax deductions.

To address concerns regarding the concentration of donations in specific municipalities and the dominance of portal sites, the Ministry is implementing stricter rules. These include a ban on point rewards for donors starting in October 2025 and a plan to reduce the maximum allowable expenses for gifts and administrative costs to 40% of the donation amount by fiscal year 2029.

Local governments are increasingly using the system for targeted crowdfunding. Maizuru City has launched a project via the Furuナビ portal to support equipment investment for local businesses, while Nara Prefecture is partnering with Satofull to launch 37 projects aimed at preserving cultural assets and disaster prevention.