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New 'tree tax' to be tacked on to Japanese residential tariff

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A new national “forest environment tax” of 1,000 yen ($9) will be added to the residential tax to fund the cost of managing unattended woodland and mountains, reported The Asahi Shimbun (Japan).

It will likely start around fiscal 2024, but some members of the ruling coalition want it to be introduced earlier.

The details will be included in the tax reform outline that is scheduled to be finalized in mid-December.

Similar taxes to maintain trees and water resources are already included as part of the residential tax in 37 prefectures and Yokohama, with the amounts added varying between 300 yen to 1,200 yen per year.

There is a concern that the new national tax would create a “double taxation” system, but the government plans to coordinate with prefectural and city governments to fix this issue by spending the money on different things, for example.

The new tax would be added to the existing residential taxes on about 62 million people.

The additional tax revenue of about 60 billion yen per year would be distributed to municipalities, in principle, proportionally to the amount of forested area they have. The money is expected to be used for thinning overgrown forests and training forestry technicians.

Although the year 2024 has been mooted, politicians who are involved in farming and forestry-related issues have called for the introduction of the "forest tax" to coincide with the implementation of the “forest bank” program to care for unattended plantations, which is likely to be in fiscal 2019.

During discussions within the ruling Liberal Democratic Party, another suggestion was made for the earlier introduction and gradual increase of the amount until it reaches 1,000 yen in fiscal 2024.

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