Japan's Ministry of Internal Affairs and Communications has requested that major furusato-tax portal operators reduce the commission fees municipalities pay for donations [1].
This move aims to alleviate the financial burden on local governments that rely on these portals to attract tax donations. Municipalities have reported that these commission fees are more than three times higher than ordinary e-commerce rates [2].
Furusato-tax portals, including major operators such as Satofull and Rakuten, facilitate donations from taxpayers to regional municipalities in exchange for local gifts [1]. However, the cost of using these platforms has become a point of contention as the volume of donations grows.
According to data from fiscal year 2024, total furusato-tax donations reached 1.2 trillion yen [3]. Approximately 11.5% of those funds, totaling about 137.9 billion yen, were paid out as portal fees [3].
Hidetoshi Terazaki, the director-general of the Local Tax Bureau at the Ministry of Internal Affairs and Communications, said the ministry is requesting portal sites to work promptly on lowering fees to reduce the cost burden on local governments [4].
The ministry has asked the portal operators to provide a response to this request by August 2024 [3]. Local governments nationwide are affected by these fee structures, which determine how much of the donated tax revenue actually remains with the municipality to fund public services [1].
The request comes as the government seeks a more sustainable balance between the digital infrastructure provided by private portals, and the fiscal health of the rural areas the system is designed to support [2].
“Portal fees are more than three times higher than ordinary e-commerce rates”
The Japanese government is attempting to curb the 'intermediary tax' captured by private tech platforms within a public tax system. By pressuring portals like Rakuten and Satofull to lower fees, the ministry aims to ensure a higher percentage of donation funds reach local infrastructure and public services rather than corporate profits.
