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Japan resort town Karuizawa gets $3.4M in 'hometown tax' donations -- 4 times above hopes

Some of the Nagano Prefecture town of Karuizawa's return gifts are seen in a screenshot of the "hometown tax" donation website "Furunavi."

KARUIZAWA, Nagano -- The central Japan resort town of Karuizawa received some 400 million yen (about $3.4 million) from the "hometown tax" donation scheme in 2021 -- four times officials' expectations.

    The Karuizawa Municipal Government introduced the hometown tax initiative, which allows donations to any municipality in exchange for tax breaks and return gifts, in 2021. Under the expectation that at least the same amount of donations will be made this year, the municipal government's initial budget bill for fiscal 2022 allocated 200 million yen (approx. $1.7 million) for hometown tax-related expenses including return gifts.

    The town began accepting hometown tax donations with return gifts in September 2021. Its primary aim is to support the town's local industries and tourism businesses hit hard in the pandemic by having them handle return gifts. As of January this year, there are 214 kinds of return gifts from 60 local government-certified businesses fulfilling certain conditions, and they include hotel coupons as well as beer, jam and ham.

    According to the municipal government, 400 million yen was donated to the town in a little over the three months spanning until the end of December 2021. About 90% of donations were for hotel coupons. A town official praised the result, saying, "If they use accommodation facilities here, we can expect a positive knock-on effect for other businesses including souvenir shops and restaurants."

    To further support local businesses handling return gifts, the municipal government is considering making certification stickers they can put up on storefronts or elsewhere.

    (Japanese original by Go Kumagai, Nagano Bureau)

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