The brief highlights a unique tax decentralization initiative implemented in Japan (Furusato Nozei Program), in which taxpayers donate their taxes to local governments through digital platforms in exchange for a variety of local offerings provided by participating municipalities. It underscores the role of digital transformation that contributes to information dissemination, tax payment simplification and public participation enhancement in the tax decentralization process.
These benefits can support local economies and advance all Sustainable Development Goals (SDGs), especially for local governments struggling to generate tax revenue due to depopulation or lack of major industries. G20 countries can develop strategies to leverage digital solutions in revenue mobilization and tax decentralization, including promoting digital tax payment platforms, improving transparency and accountability, and increasing public involvement in local governance. Through collaboration and technological innovation, G20 countries can advocate fiscal decentralization, reduce regional disparities and promote sustainable development across all regions.
The publication is an output of T20 Brasil Task Force 5 on Inclusive Digital Innovation. T20 Brasil is an engagement group of the Group of 20 (G20) that brings together think tanks and research centres from G20 members, guest countries and international organizations. It aims to help G20 leaders address pressing global challenges and seek a sustainable, inclusive and resilient society.
Suggested citation: Pu Jian, Korwatanasakul Upalat, Alexandra Marie Naval Sumaway, Pitchaya Sirivunnabood and Chapagain Saroj. Revitalizing Local Economies: A Case of Japan's Furusato Nozei Program and Its Digital Transformation Impact on Tax Decentralization, Economic Growth, and Sustainable Development : UNU-IAS, 2024.
