Topics 2 Local Tax and Finance System
Local tax and finance system supports community activities.
Japanese local authorities are responsible for regional administration in such fields as welfare, school education, fire fighting and improvement of the infrastructure such as highways and rivers. Therefore, local finance systems, as well as the national system, play an important role.
Now, such tasks as the promotion of decentralization and enhancement of the welfare system through the introduction of long-term-care insurance for the aging society, and the accompanying financial measures, are also becoming more important.
Improvements for a balanced budget： Preventing bankruptcy in the 21st century
The Japanese national and local finance systems now face severe conditions, and the national government has decided to adjust the ratio of national and local deficits to 3% or less of GDP by 2003. It is expected that the Ministry of Home Affairs will allocate enough income to local fiscal plans to resolve local financial issues and will promote the improvement of regional finances.
The role of local finance
Regional administration closely related to daily life is handled by local authorities, and the local finance system, as well as the national system, plays an important role. Local finance expenditure accounts for two-thirds of the total government annual expenditure.