JIJI — Japan is considering distributing to prefectural governments 10 to 30 percent of revenues acquired from a proposed tax designed to secure financial resources for forest management and conservation, sources said.
The initial plan was to allot all of the proceeds from the new forest environment tax to cities, towns and villages.
But the central government and the ruling coalition have decided that prefectures will also need a certain amount of funds for the development of forest management workers and to promote the use of wood — tasks municipalities would have difficulty carrying out by themselves, the sources said.
The new allocation plan for the tax revenues will be included in the fiscal 2018 tax system reform package which the Liberal Democratic Party-led ruling coalition will draw up in December.
Forests play an important role in absorbing greenhouse gas emissions and curbing landslides, but many in Japan are in poor shape due to lack of maintenance, including cases in which landowners live far away.
The new tax will raise funds to help the smaller local governments thin forests and plant trees on behalf of forest owners. Plans for the tax are set to be decided, at an outline level, as part of tax system reforms for the year starting next April.
Regarding the tax revenues, municipalities with broad mountainous areas had asked the central government to distribute the full amount to cities, towns and villages. But the National Governors’ Association asked for proceeds to be allocated to prefectural governments, mainly to train personnel with the skills to perform forest maintenance.
It is likely the tax for forest management will be imposed in the form of an addition to individual residential tax, from the viewpoint of distributing the burden to a wide range of people.
The tax will be levied by the central government and allotted to municipalities in accordance with the size of forest areas within their borders.
The government and the ruling coalition are examining the option of collecting ¥500-¥1,000 per head annually. If ¥1,000 is charged per year, annual revenues will total about ¥60 billion.
The new tax may be introduced in fiscal 2024, the year after the add-on residential tax to help reconstruction of areas affected by the March 2011 earthquake and tsunami ends, but municipalities are calling for it to be introduced earlier.
Tax system research panels for the ruling parties, which will examine the fiscal 2018 tax system reforms from next week, are expected to discuss the timing carefully and also take into consideration the scheduled consumption tax increase in October 2019.