Establishing a Self-Financing Base for Decentralization: Case Study of Basic Municipalities in the Tokyo Metropolitan Area

Abstract

This paper examines the relationship between the perception of the factors that cause an increase in local taxes, important measures for securing tax revenue by basic municipalities in the Tokyo metropolitan area, and factors that determine the ratio of local taxes to revenue.

The analysis revealed that the measures to secure tax revenue considered important by basic municipalities are mainly defined by the revenue structure and that there are differences in measures between neighboring basic municipalities. It was also found that there is regional cohesion in the perception of factors that increase local taxes, which is consistent with the determinants of the ratio of local taxes to revenue estimated by spatial analysis. Further, some basic municipalities have achieved an increase in tax revenue through measures that respond to regional characteristics.

Ultimately, more effective measures of securing tax revenue will be achieved by considering measures based on regional characteristics and wide-area cooperation to increase the tax base and establish a self-financing base for decentralization.