Kobe, taxes, and hills: the golf courses of Hyogo Prefecture ゴルフ場利用税堅持のための全国市町村連盟

The Kobe Golf Club 神戸ゴルフ倶楽部, built in 1903, is the first golf course in Japan, and still operates today. Perched approximately 931 meters^[1]above sea level, the club’s location is a reminder of how the physical development of Kobe is greatly influenced by the steep hills pinning the city against the ocean. (Photo source)

Here are some pictures from Venus Bridge 神戸ヴィーナスブリッジ (map), which give an impression of how quickly the flats of Kobe Harbor rise away from the ocean.

Further uphill from Venus Bridge (and to the west) is Kobe Golf Club (map), from which the harbor can be viewed from the clubhouse porch:

Golf, golf, and more golf

For better or for worse, Hyogo Prefecture, of which Kobe is the capital, is home to an impressive concentration of golf courses, particularly in the hills north and northwest of the city. On Google Earth, the golf courses look like worms that eating away at the earth’s skin.

Here is essentially the same image, including the names of various golf courses (map).

An article in The Japan Times from October 29, 2000 provides background. “Once ‘golf course heaven,’ Hyogo now at opposite extreme”:

“No local government pursued the development of golf courses more eagerly than Hyogo Prefecture. As of last year, there were an estimated 145 golf courses in the prefecture.

While most Hyogo courses are privately run, many of the newer ones built within the past 20 years are concentrated around areas that the prefectural government had hoped to develop as new urban centers.

For example, the Sanda area, about 15 km northeast of Kobe and near the Osaka border, has 34 golf courses, all built with the expectation that the prefectural-led effort to lure businesses to the area would also bring in golfers.

That has not occurred. As a result, many of the Sanda golf courses are losing money, and some are believed by local economists and antigolf course activists to be bankrupt.”

Golf course utilization tax ゴルフ場利用税

Prior to 1989, a tax on golf was levied via the Entertainment facilities use tax 娯楽施設利用税, which included golf, pachinko, mahjong, and billiards. For golf, the tax was 1,100 yen per person per day of golf. This old tax appears to be labeled “Local entertainment tax” per data compiled by the OECD (source), which is charted below. I’ve included various other taxes for comparative purposes, and for humor. The “bathing tax” seems to be chugging along just fine.

As you can see in the chart. the “Local entertainment tax” plummeted from 133 billion yen to zero in 1989, while the “golf course utilization tax” went from zero to 76 billion that same year. The new golf tax is a local tax and is based on 7% of golf revenues (I don’t know if this is charged at the point of sale, but I presume it might). Fortunately for golfers, the tax does not apply to driving ranges, of which Japanese cities have many.

For 2013, revenues from the golf course utilization tax were 51 billion yen, or approximately $440 million dollars. This is a boon to municipalities in areas such as Hyogo Prefecture, but some politicians are trying to repeal the tax.

Leading the repeal effort is Eto Seishiro 衛藤征士郎 of the Liberal Democratic Party (LDP), chairman of the “Golf Promotion Parliamentary League” 「ゴルフ振興議員連盟」. I took a look at Seishiro’s website and found a post* which includes a curious line. It goes something like this: the 2016 Olympics in Rio de Janeiro will feature golf; Tokyo will host the 2020 Summer Olympics; hence, having a tax that “picks on” golf should not be allowed. Original text:

ゴルフを狙い撃ちした課税を行うことは許されるものではありません。
_{* Eto Seishiro’s website; broken link: seishiro jp/archives/5614 html}

I’m sure the “Golf Promotion Parliamentary League” has more sophisticated reasons for wanting to repeal the golf tax, but I can’t help but share that chestnut.

Meanwhile, civic leaders have formed the “National Municipal League for golf course use tax adherence” 「ゴルフ場利用税堅持のための全国市町村連盟」, citing the reliance of sparsely populated golf regions on golf tax revenues, and the fact that roads and other services (requiring tax dollars) are used to support the golf courses. A good overview (in Japanese) of their concerns is detailed in the attached report, signed by the mayors of Miki City, Hyogo Prefecture 兵庫県三木 and Oyama, Shizuoka Prefecture 静岡県小山.

I’m curious to see how this debate plays out. (Photo source)