Japan has launched the "Government Efficiency Department" (DOGE) initiative, reforming tax incentives and subsidies.

The Japanese government recently launched the “Government Efficiency Department” (DOGE) program, aimed at reforming long-standing special tax measures and subsidies. Finance Minister Katayama pointed out that temporary tax cuts could lead to an annual fiscal revenue shortfall of approximately 15 trillion yen, thus highlighting the urgent need for objective indicators to assess tax expenditures.

The Cabinet Secretariat has established the “Office for Special Tax Measures and Subsidy Review,” with approximately 30 staff members responsible for reviewing various tax benefits, particularly the actual effects of corporate tax incentives. Katayama emphasized that public participation is crucial, and the government will collect public opinions before the end of the year to enhance the transparency and social recognition of the reforms.

The Japanese DOGE plan references the experience of the U.S. Department of Efficiency, but places greater emphasis on stability and substantive reform. The U.S. version, led by Elon Musk during the Trump administration, took symbolic measures to cut inefficient spending but failed to achieve its comprehensive goals. Japan hopes to adjust or restructure inefficient taxes and subsidies through scientific assessment and auditing to enhance the efficiency of fiscal resource utilization.

The reform is expected to be implemented in the fiscal year 2027, with a careful evaluation of hundreds of tax measures and subsidies, using objective criteria to avoid the continuation of inefficient projects based on past subjective judgments. At the same time, the plan aims to enhance transparency by soliciting public opinions, allowing the public to understand the necessity of the reform.

The launch of the DOGE plan shows that the Japanese government is striving to modernize the tax system while addressing the pressure on fiscal revenues, in order to support economic growth more effectively and balance budget constraints with public service needs.