The mayor of Kaohsiung, Tsao Mei, announced the official launch of the Japanese version of "DOGE Government Efficiency Department", aiming to innovate special tax systems and subsidies.

The Japanese government officially launched the “Japanese version of the DOGE Government Efficiency Department” review mechanism on the 25th of this month. The goal is to comprehensively review special tax policies and government subsidies, strengthen fiscal discipline, and reduce waste. The Cabinet Office will establish a new office soon, with about 30 staff members from different ministries involved in the review, responsible for identifying the “hidden subsidies” and tax incentives that have been difficult to address over the years. Finance Minister Katayama stated at a press conference that he will broadly solicit public opinion through social platforms like X, emphasizing that reform requires social support.

Japanese Prime Minister Sanae Takaichi has clearly instructed Finance Minister Kiyoshi Katayama and relevant cabinet members of the Ministry of Finance to work together to promote reforms. Takaichi believes that the long-accumulated issues related to special tax systems and subsidy structures need to be reevaluated urgently. Internal government sources also reveal that Chief Cabinet Secretary Hiroshi Kihara is expected to serve as the head of the Efficiency Bureau. What kind of policy impact will the establishment of the Japanese version of DOGE have on the Liberal Democratic Party led by Sanae Takaichi? Japanese media is actively discussing this topic. This article is excerpted from Hiroyuki's warning “Will the Japanese version of DOGE only create new waste? Is a reduction of 33 trillion yen feasible? What is the Government Efficiency Bureau?” at Abepura summary.

The Japanese version of DOGE is named after the American reform organization of the same name established by Musk.

The so-called “DOGE” originates from the “Department of Government Efficiency” established by the U.S. government earlier this year. The department is led by Musk as a chief advisor and is known for its strong reforms, having frozen the operations of the U.S. Agency for International Development and laid off a large number of administrative personnel. Although it claims to have significantly saved the budget, it has also led to negative consequences such as union lawsuits and stagnation of public services, ultimately resulting in Musk's resignation in May. Japanese media refer to the newly established unit of the Japanese government as “Japanese version of DOGE,” implying its reform intensity and political risks.

Experts and politicians: Can Japan replicate America's “DOGE Reform”?

Opinions among Japanese civil society, the political arena, and academia differ on whether Japan can promote efficiency reforms similar to those in the United States. Some commentators believe that Japan's administrative system has gradually examined waste over the years through systems such as policy reviews and administrative business reviews, and that the actual space to “cut several trillion yen from the budget” is quite limited.

Some comments pointed out that Japan has attempted to reorganize spending from the time of the Liberal Democratic Party, Komeito, to the Democratic Party's period in power, but usually only stays at the level of “maintaining the status quo after cutting a few items,” making it difficult to address structural reforms. Some interviewees also bluntly stated: “Establishing efficient departments often becomes a formality, ultimately just a new bureaucratic organization.”

Former Growth Chairman Aoyanagi from the Restoration Party, as well as experts involved in administrative reform, have pointed out that Japan's current administrative processes have accumulated too many vested interests, and without clear political will, it is difficult to promote genuine reductions.

The special tax system is regarded as the largest “black box”; the Japanese government will take action for the first time.

Many experts attending the discussion pointed out that Japan's special tax system has long been regarded as a “black box.” The beneficiaries of tax reductions include those engaged in agriculture, companies that raise wages, and those that invest in research and development, among others. Various tax exemption systems have been described as “another form of subsidy.” Moreover, these tax measures are unprecedented, as they have not been included in administrative project reviews. The reason is that Japan's tax system is very unique; the special revitalization measures are targeted tax reductions for specific companies and certain types of individuals. Special tax reduction measures. For those engaged in agricultural activities, tax reductions will be granted or full tax will be levied on land acquisitions; for companies that strive to hire a large number of employees, raise wages, conduct research and development, or build sanitary facilities, tax reductions will also be granted. In reality, this is almost no different from subsidies.

Subsidies are usually subject to audits and inspections, while special tax systems often lack transparency and frequently become a source of interests for “tribal politics” or specific industry groups. The new government hopes to open the black box for the first time through the “Japanese version of DOGE” and take stock of the special tax reduction projects that have been repeatedly extended in the past.

However, there are also comments warning that there is strong support within the Liberal Democratic Party for the special tax system, and reform is bound to face significant resistance. Some experts believe that to fill the tax revenue gap caused by the abolition of temporary gasoline taxes, it is indeed reasonable to cancel some special tax reductions, but it is politically very challenging.

Subsidy scale and reduction targets questioned: Setting a “trillion yuan level” target criticized as unrealistic.

During the discussion, there were also doubts about the setting of reform goals. Some individuals pointed out that if the government sets a target of “cutting several trillion yen” without fully reviewing the projects beforehand, it may repeat the past mistakes of “cutting hard to achieve numbers,” ultimately sacrificing necessary investments.

There are also those with experience in administrative reviews who recall the situation of the “government review” televised during the Democratic Party era, believing that it emphasized “political theater based on waste,” making it difficult for society to truly understand the functions and necessities of policies.

Many experts emphasize that some expenditures cannot be simply measured by cost-effectiveness, such as investments in technology research and development, supercomputers, etc. Focusing only on short-term cuts may actually harm the country's future competitiveness.

Digitalization and Local Government System Issues: Reforms May Fall into Restrictions on Local Autonomy

The discussion has also extended to digital reforms. Some experts criticize that over 1,700 local governments in Japan still establish their own information systems, resulting in huge waste. Although the digital director has proposed a reference model, there is a lack of enforcement, and the central government cannot require local governments to unify their systems.

Some scholars believe that the Japanese local autonomy system itself limits the central government's ability to promote comprehensive reform. With the legal system unchanged, even if the efficiency department is established, it is difficult to exert substantial influence on the waste in local administration.

The core dilemma of Japan's reforms: political will and social consensus

Multiple interviewees concluded that the issue is not whether to establish a new institution, but whether the political leadership is willing to bear the political costs of cutting subsidies and confronting interest groups. Some pointed out, “It is almost impossible to find a budget reduction plan that everyone agrees on.” Others believe that real reform requires the strong political will demonstrated by Osaka's restoration.

Despite the numerous controversies, the launch of the Japanese version of DOGE is still seen as a symbol of the new regime's determination for reform. Whether it can produce substantial results in special tax systems, subsidies, and administrative efficiency in the future will be a key indicator for assessing the government's reform capabilities.

In this article, Gao Shizao Miao announced that the Japanese version of “DOGE Government Efficiency Department” has officially launched, aiming to innovate the special tax system and subsidies, first appearing on Chain News ABMedia.