#Japan #Tokyo #Local Government #Furusato Tax #Baton Pass

Exploring the Utilization of Corporate Furusato Tax Among Local Government Employees in Japan

In recent years, Japanese local governments have faced numerous challenges, including population decline and the aging demographic, which threaten regional industries. These municipalities seek innovative strategies for revitalization. A recent survey conducted by Plamplan Co., Ltd., focusing on the utilization of the corporate version of the Furusato Tax, has shed light on the practices of local government staff outside of Tokyo.

Background

Local governments are continually tasked with addressing issues that require multifaceted approaches. The Furusato Tax system, which allows individuals and corporations to donate to local governments in exchange for tax benefits, has emerged as a significant resource to support these efforts. With the declining resources available, understanding how municipalities are leveraging this system is crucial. Thus, the Baton Pass platform, operated by Plamplan Co., Ltd., sought to investigate how local government employees outside Tokyo are utilizing the corporate Furusato Tax.

Survey Summary

The survey findings revealed compelling insights:

• - Over 70% of local government employees outside Tokyo utilize the individual Furusato Tax system.
• - The primary motivation for utilizing this system is the large donation amounts, which benefit the municipalities.
• - The leading reason for not utilizing this system is the prioritization of other initiatives.
• - More than half of the respondents also utilize the corporate Furusato Tax, with motivations similar to those for the individual version.
• - Common barriers preventing corporate participation include low awareness and difficulties in project development that attracts corporate interest.

Survey Methodology

The survey was conducted from April 4 to April 7, 2025, targeting local government employees aged 20 to 50 in areas outside Tokyo. A total of 330 individuals participated, and the data was sourced from RC Research Data.

Key Findings from Local Government Employees

Individual Furusato Tax Utilization

Among respondents, those who indicated they were utilizing the individual version of the Furusato Tax constituted:

• - 44.6% actively utilize it.
• - 26.4% are actively engaging with the system.
• - Only 25.1% reported they did not utilize it at all.

This indicates that over 70% of local government employees are actively leveraging the benefits of the individual Furusato Tax. The redirection of municipal revenues through this system has proven beneficial.

Reasons for Utilizing the Individual Furusato Tax

Among those utilizing the individual version, the primary motivation is:
1. Substantial Donation Amounts (37.2%): The significant financial contributions are seen as advantageous for local governments.
2. Effective PR and Development (27.8%): Successful promotion and innovative return gifts enhance engagement.
3. Collaboration with Local Enterprises (22.2%): Local partnerships boost the effectiveness of tax utilization.

Barriers to Utilization

Conversely, for those not participating in the individual version, the most common reasons included prioritization of other initiatives (25.0%), budget constraints (17.7%), and underwhelming donation amounts (16.7%). These barriers highlight the competing needs within local governance.

Corporate Version of the Furusato Tax

A similar inquiry into the corporate version revealed that:

• - 42.1% of local employees find the corporate version beneficial.
• - 34.9% do not engage at all.
• - 13.3% are actively utilizing it as well.

This demonstrates that more than half of staff members are involved with the corporate version, principally due to its potential for significant contributions to local initiatives.

Motivating Factors for Corporate Involvement

The top reason cited for engaging with the corporate version was again based on the impact of substantial donations (30.1%). Additional reasons included:

• - Existing corporate connections (20.2%) and considered facilitation of corporate approach methods (15.9%).

Barriers to Corporate Engagement

Barriers arise primarily from the low visibility of the program (23.7%), challenges in creating appealing projects for corporations (18.2%), and unclear outreach methods (13.5%). These hurdles underscore a need for improved communication strategies to bolster corporate engagement with municipal activities.

Utilization of Donations

Respondents highlighted that the primary areas for applying Furusato Tax contributions are education and child-rearing initiatives (21.8%) and local economic revitalization (19.4%). This illustrates a commitment to areas fundamental for sustainable regional growth.

Conclusion

The survey concludes that a significant majority of local government employees outside Tokyo are effectively engaging with both individual and corporate versions of the Furusato Tax, driven chiefly by the substantial benefits that donations confer upon their municipalities. However, challenges remain, especially regarding awareness and project development to enhance corporate participation, which can be paramount in fostering collaboration between businesses and local governments.

Plamplan Co., Ltd.'s Baton Pass aims to bridge this gap, further facilitating the connection between businesses and municipalities and supporting the objectives of regional revitalization. For more information, visit Baton Pass.