Business Standard - To encourage parents to migrate out of Tokyo, the Japanese government has increased the financial incentive for those who decide to do so. According to Financial Times (FT) report, from 300,000 yen earlier, the migrating parents will now receive 1 million yen per child, if they move out of the capital. Read more
The Japanese government in the coming fiscal year will increase financial support for families with children who decide to move out of the Tokyo metropolitan area. The government will provide up to 1 million yen ($7500) per child, increasing the incentive by 700,000 yen.
The incentive was launched in 2019 and aims at encouraging people to raise children in the areas where birth rates are declining and population is ageing.
Eligibility: Residents who have resided in the 23 wards of Tokyo for the last 5 years in the past decade, including 2022, are eligible for the programme. Families who have working parents commuting to wards from elsewhere in Tokyo, as well as those living in Saitama, Chiba and Kanagawa prefectures are also eligible.
Aim: The Japanese government says that the programme is a part of its Infrastructure Development Plan for Digital Garden City Nation. This aims to revitalise regions other than the capital region by promoting relocation to rural areas by means of digitization.
The country already has a similar plan for relocation, which provides 300,000 yen per child and 3 million yen as a one-off support payment for those migrating. They may claim more money if they start a business of their own in the suburbs. The earlier plan has, however, been ineffective, as only 2400 people opted for it in 2021. This amounts to only 0.006% of Tokyo's population.
Why is Japan offering the package? Japan is undergoing a rapid change in its demography, with a falling birth rate and a high proportion of people above the age of 65 years. In addition, despite several steps taken by the government, the demographic reality has stuck stubbornly.
In 2017, Japan's National Institute of Population and Social Security Research stated that the number of births in a year will fall below 800,000 by 2030. However, the mark was breached in the first nine months of 2022 itself, signalling that the fall is much faster than anticipated.
The smaller parts of the country is in turmoil as fewer people are being born and younger people are moving to Tokyo and other metropolitan cities like Osaka. Small businesses and shops in smaller towns have difficulty finding customers and workers.
On top of everything, Japan has the highest inheritance tax globally. It ranges from 10% to 55% depending upon the amount of money being inherited. The calculation also depends upon the number of heirs. It applies to both nationals and foreigners.
Inheritance tax is a levy on assets inherited from a deceased person.
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