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Ministry to let local bodies send some external products to 'hometown tax' donors as gifts

A sign for the Ministry of Internal Affairs and Communications is seen in Tokyo's Chiyoda ward in this file photo taken on Nov. 14, 2017. (Mainichi)

TOKYO -- The Ministry of Internal Affairs and Communications has informally decided to allow local bodies to send goods manufactured or processed in other areas to taxpayers in return for their use of the "hometown tax donation" system if certain conditions are met.

Under the donation system, people can donate money to municipalities, and in exchange receive income and residential tax credits. The municipalities then send local products to the donors as thank-you gifts.

Until now, the ministry has defined the local products that can be sent to donors to "items that have been produced and services that are provided within the bounds of the municipality."

Now, however, it is poised to make exceptions and allow products from other areas that are "akin" to the accepted items. These will include products whose main part or ingredient comes from that municipality. Local mascot goods will also be accepted as gifts regardless of where they are produced.

The planned change follows a spate of requests from local bodies to allow products processed in other areas to be sent as gifts.

Examples of the new products that will be allowed include gelato and dairy products made in other municipalities using milk or fruit from the area receiving the donation. In addition, products whose main ingredients come from other areas, but which are primarily processed in the area in question will be acceptable as gifts, along with products containing ingredients from other areas that can't be separated from the local ingredients, such as blended rice shipped out by Japan Agricultural Cooperatives. In addition to mascot goods, postcards and original "karuta" playing cards promoting the local body will also be acceptable even if they are produced in other areas.

Aiming to curb excessive competition among local bodies in their gifts, the ministry plans to exclude municipalities from the hometown tax system if they send unpermitted items from other areas or if their gifts exceed 30 percent of the value of the donations.

A bill to amend the Local Tax Act to have the minister of internal affairs and communications designate the local bodies that can participate in the hometown tax system will be presented at a regular session of the Diet convening on Jan. 28.

(Japanese original by Masahiro Tateno, Political News Department)

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