FY2026 Local Finance Council Meeting Summary (August 18)

The Local Finance Council took up appropriate price pass-through in local government procurement as an agenda item and, on August 18, Reiwa 8, received an explanation of the results’ overview and future action policies based on two survey results published on July 7, Reiwa 8.

The subjects were the status of introducing the low-bid price survey system and the minimum price restriction system, as well as the status of responses to rising prices and wages. After the explanation, questions and answers were exchanged, along with views on the actual conditions of price pass-through and its reflection in ordinary local allocation tax calculations.

The need for the Japanese government to support price-pass-through efforts as finely and carefully as possible was indicated, taking into account that the substance of price pass-through differs by organization size and industry.

It was indicated that, in calculating ordinary local allocation tax, consideration is needed so that small organizations that have not outsourced some of the covered services to the private sector are not disadvantaged.

Going forward, interviews with local governments will be conducted based on the survey results, and responses will be considered after hearing about individual circumstances and action policies. Even when specific, case-by-case advice is difficult, price-pass-through efforts will be supported as finely and carefully as possible.

When calculating ordinary local allocation tax, consideration will be given to methods that do not disadvantage organizations that have not outsourced some of the covered services, such as excluding services not outsourced to the private sector from the calculation and calculating based only on services that have been outsourced.