Abstract
Since the Omnibus Decentralization Act of 1999 was passed, 37 prefectures have introduced local forest environment taxes to raise revenue for forests and forest-related projects (forestry projects). When the taxes were introduced, each prefectural government explained why it had raised funds for new projects to seek a broad understanding from residents. Some prefectural governments have established third-party organizations to ensure public participation and to verify the effectiveness of the tax. However, studies of their outcomes are limited. Hence, this study analyzes tax system administration and revenue raising using the local forest environment tax in Nagano Prefecture (Nagano Forest Tax) as a case study. The results are as follows. First, the prefectural government allocated tax revenue under the indicated usage policy when introducing taxes. At the end of each taxation period, the two organizations presented their verification results and raised concerns about improvements to implement the tax effectively. Thereafter, the prefectural government revised its expenditure policies based on these recommendations and made several advancements during the subsequent taxation period. Second, comparing the average amount spent on total forestry projects for each period, only the amount spent in the first period (FY 2008-12) exceeded that before tax introduction (FY 2005-07). The prefectural government has introduced the tax to raise revenue for new forestry projects. However, the average amount of general revenue resources allocated to total forestry projects for each taxation period was lower than that allocated before the tax was introduced, contradicting the figures provided by the prefectural government.
