2. Methods

includes many types of ownership, but the highest proportion is owned by individual private foresters (hereinafter, called "forest owners" or "private forest owners"), many of whom were small-scale farmers in the past. A total of 1,018,752 people are forest owners with a total forested area of 5.7 million ha.1 The forested areas owned by individual forest owners in Japan are generally small, as approximately 761,086 of the 1,018,752 owners have <5 ha of forest.2 Almost all forest land owned by private forest owners was obtained by inheritance from family mem-

Japan has one of the most rapidly aging societies in the world, and 26.6% of the population was >65 years of age in 2015, more than any European country. In mountainous regions, in particular, depopulation and aging have progressed simultaneously. In about 44.4% of forest households, householders were ≥65 years old in 2000 [2]. Therefore, the proportion of households of which the householder is ≥75 years old is increasing. Forest inheritance will increase under these conditions and there will likely be problems related to forest inheritance in the

Since the national land survey has not been completed, the number of forested areas for which the correct boundaries are not known is increasing, as many owners do not know the specific boundaries of their forested areas. Forest owners were more aware of their boundaries in the 1950s when fuelwood was consumed for heat. This relationship between the forest and forest owner weakened when fuelwood consumption decreased. In addition, as a result of depopulation and aging, some hamlets have disappeared [3]. In such districts, the new owners who inherited forested land were non-residents and were likely to abandon any forest management

An inheritance tax is due when any property, including forest, is inherited. However, the inheritance tax and annual fixed property tax became a burden to private forest owners once they were no longer gaining additional economic benefits from the forest. The economic importance of broad-leaved trees decreased drastically when fuelwood was no longer consumed, and stumpage prices for coniferous plantation forests, such as Cryptomeria japonica and Chamaecyparis obtusa, decreased greatly. This became a problem because owners cannot afford the costs of planting and weeding after cutting when the stumpage price is low, and they

The problems of forest inheritance are complex and are related to various conditions and problems surrounding Japanese forestry. In this chapter, the problems related to forest inheritance in the current and near future are revealed from the perspective of the inheritance tax system. Section 2 presents the research methodology. A general explanation of the Japanese and forest inheritance tax systems is described in Section 3. In addition, three current problems are discussed: preferential treatments to reduce the forest inheritance tax, the relationship between the forest inheritance tax and the forest planning system, and the

Ministry of Agriculture, Forestry, and Fisheries, the 2000 World Census of Agriculture and Forestry (in Japanese)

0.1 ha, and 1,452,225 forest owners owned forest land from 0.1 ha to 1 ha.

In the 1990 World Census of Agriculture and Forestry, the minimum holding size of the surveyed forest owners was

bers, until now.

160 Taxes and Taxation Trends

near future.

activities.

1

2

cannot harvest the coniferous trees.

This research included a literature survey and analysis based on government statistics, predominantly from three sources.

The first data source was the National Tax Agency Annual Statistics Report,<sup>3</sup> in particular the national total number of ancestors and value of forest land properties from a breakdown table of inherited property by type. Although this data provided information on the ancestors, it was difficult to obtain data on inheritors. The value of timber was based on the price of standing timber at the standard cutting age, which is published almost annually in the form of a circular notice on legal interpretation from the Director General of the National Tax Agency to the heads of regional taxation bureaus. For example, in Yoshino, the calculation was based on the Yoshino forestry area of Nara prefecture under the authority of the Osaka Regional Tax Bureau.

The second source of data was the Census of Agriculture and Forestry, which included basic statistics related to forest owners, although the data were not always continuous due, for example, to national budget cuts. The minimum holding size of forest land included in the survey was 0.1 and 1 ha in the 1990 and 2000 censuses, respectively. Moreover, since 2005, the survey interval changed from 10 to 5 years, and the survey method changed completely. To account for these differences, only forest owners with ≥1 ha were considered in this study.

Finally, the third source of data was Housing and Land Statistics. The Statistics Bureau of Ministry of Internal Affairs and Communications collect this data every 5 years. Although the main objective of these statistics is to survey the housing situation, survey items related to land owned by each household were added in the 1998 survey. There are two surveys: survey A was completed by approximately 3 million householders and survey B was completed by 0.5 million householders. For the first time in the 2013 survey, survey A included a survey item on ownership of land other than current residence, including farmland and forest land.

In this chapter, examples of tax calculations for forest owners were not included, in part because the inheritance tax is estimated for all inheritance properties including forest and it is difficult to show a separate calculation for forests. Usui and Hayashi [4] noted that the contents of inheritance properties differ, and the value of the inheritance tax for forest and the burden it places on the inheritor may differ. Furthermore, it is generally difficult to determine all inheritance property based on on-site surveys.

<sup>3</sup> Tax statistics are available at https://www.nta.go.jp/foreign\_language/tax\_statics/index.htm. This statistic is published in both Japanese and English.
