Key Facts
• Starting October, point rewards for ‘Hometown Tax’ donations will be banned.
• Municipalities currently pay 13% of donation totals to intermediary platforms.
• The ban aims to reduce financial burdens and curb excessive point competition.
• Major platform Rakuten filed a lawsuit in July 2025 against the Ministry of Internal Affairs’ directive.
• Popular return gifts include luxury food items like wagyu beef and daily necessities.
• Many donors are rushing to make contributions before the ban takes effect.
• Donors previously enjoyed both return gifts and point rewards, described as a ‘double benefit.’
Summary
The Japanese government will prohibit point rewards for ‘Hometown Tax’ donations starting October 2025. This decision aims to alleviate financial strain on municipalities, which currently allocate 13% of donation totals to intermediary platforms. The ban also seeks to address the escalating competition among platforms offering point incentives. Rakuten, holding a 60% market share, has legally challenged the directive. Donors, who previously enjoyed both return gifts and point rewards, are expressing disappointment, with many rushing to make contributions before the policy change. Popular return gifts include luxury food items and household goods, highlighting the program’s appeal.
