December 10, 2025
Japan Association of New Economy (JANE)
Representative Director Mickey Mikitani

The Japan Association of New Economy (JANE; Location: Minato-ku, Tokyo; Representative
Director: Mickey Mikitani) issues the following statement from its representative director
regarding recent media reports that the Government and the ruling parties are considering
introducing an upper limit on the amount of tax deductions under the Furusato Nozei (hometown
tax donation) program.

JANE previously outlined its position in the “Recommendation for Tax Reform in FY 2026*,”
published on September 10, 2025, in which it expressed firm opposition to excessive restrictions
on the Furusato Nozei Program. From the perspective of promoting competition among local
governments and ensuring that regions striving for growth are duly rewarded, JANE maintains
that limitations on the program would be counterproductive. Excessive restrictions would reduce
the flow of private-sector funds to local governments as independent financial resources, thereby
constraining their ability to design and implement creative initiatives. In short, such limitations
would undermine the healthy competition that drives regional revitalization.

According to recent media reports, the government and ruling parties are considering introducing
an annual upper limit on the amount of tax deductions available through the Furusato Nozei
Program. Such a cap would significantly reduce incentives for individuals to donate beyond the
limit, directly affecting the independent revenue sources that local governments have secured
through their own efforts. This would contradict the objective of promoting local autonomy and
deal a serious blow to ongoing regional revitalization efforts.

One rationale cited for the introduction of a cap is that higher-income individuals currently
receive larger benefits. However, the existing system functions as an effective voluntary
redistribution mechanism, enabling individuals with substantial tax-paying capacity to support
local governments of their choice. Imposing an upper limit would narrow the channels for
autonomous contributions, risk reducing voluntary private support for local communities, and
conflict with the principle of transitioning from “government-led to private-sector-led” initiatives.
For these reasons, JANE strongly opposes the introduction of an upper limit on tax deductions
under the Furusato Nozei Program.

*Click here for the Recommendation for Tax Reform in FY 2026