The birth of a new service — Kokofuru

As announced at the UNIVA CAPITAL Group annual general meeting, UNIVA Paycast (UPC) has created a new service Kokofuru, to enable travelers to participate in Japan’s Furusato-Nozei (Hometown Tax) system. I want to ask everyone who is working in Japan if you have used this system.

For the past seven or eight years, I have paid the Hometown Tax. This tax minus ¥2000 can be deducted from my resident tax where I live; but, of course, I mostly pay the Hometown Tax to receive the gifts I get in return. It is probably fair to say, is it not, that most of us who use the Hometown Tax system see it as shopping?… Rakuten and other major shopping platforms make paying Hometown Tax an option for all sorts of ordinary products and daily necessities. In this distorted situation, only shopping platform operators profit from this system. It may have sounded stuck up to say so, but I found myself asking if there were other situations in which I would pay the Hometown Tax?

The Hometown Tax was originally a return-gift system intended to support the growth of local businesses, thus reenergizing local governments and stimulating regional economies. Couldn’t it be operated in a way more true to that original purpose?

In recent years the number of inbound travelers visiting Japan has shrunk, making increasing domestic tourism vital for preserving local economies. Shouldn’t we design a Hometown Tax payment service more in line with that original purpose, targeting individuals with ties to particular localities. That was the thought behind the birth of the traveler-oriented Kokofuru Hometown Tax payment service.

Another aim driving development of the traveler-oriented Kokofuru service was to incorporate tourism-related contents. Japan’s regions have an abundance of tourism-related resources. Couldn’t we make more effective use of those resources by, for example, targeting travelers with news of new Hometown Tax payment eligible products or creating packages combining new menus and food items with other local experiences to attract more Hometown Tax-paying travelers. Users of the service could include inbound travelers as well as Japanese taxpayers. This could be a new experience for inbound travelers used to paying for purchases on the spot. That could transform paying Hometown Tax into new opportunities for local governments, especially those putting effort into the project, to increase tax revenue.

This service has just been released. From now on, we need to put ourselves in the user’s shoes and ask what would move even those with weak ties to localities to try using this service to pay Hometown Tax.

Whether you travel for pleasure or business, I ask everyone who sees the words “Hometown Tax” (ふるさと納税) to stop and look around. You may discover some very special local experience.

President and CEO
UNIVA Paycast Limited
Shuhei Nakao