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Tokyo's Finances


Metropolitan taxes provided for 74.7% of the settled account for metropolitan revenue in fiscal 2016. In light of the fact that local taxes accounted for just 38.8% of the total combined revenue of all local governments in fiscal 2016, the significantly large share held by local taxes in Tokyo’s revenues is a major feature of metropolitan finances.

The metropolitan government levies 16 of the local taxes listed in the Local Tax System chart on page 35. The largest proportion of total metropolitan tax revenue in fiscal 2016 came from the two corporate taxes of Corporate Enterprise Tax and Corporate Inhabitant Tax (approximately 35.6%). This is followed by the fixed Assets Tax and the City Planning Tax (approximately 26.5%)

There are several items taxed directly by the metropolitan government in the 23 special wards, which in other prefectures are not levied by the prefectural authority but rather come under municipal taxes. This is because Tokyo provides services such as fire fighting and sewerage in the ward area, which would generally be carried out by the municipality. The government thus levies these taxes to allocate funds to pay for these operations, with 55% of tax revenue obtained from three taxes—Municipal Inhabitant Tax on Corporations, the Fixed Assets Tax, and the Special Land Ownership Tax—allocated to each of the wards to provide them with their own financial resources.

National treasury disbursements hold a smaller share in overall metropolitan revenue than in that of other local governments. National treasury disbursements accounted for 15.4% of total local government finances in fiscal 2016, while it accounted for only 4.9% of metropolitan finances in fiscal 2016.

Metropolitan bonds constitute an important financial resource to develop infrastructure and for urban renewal. To avoid a future increase of financial burdens, the metropolitan government is endeavoring to refrain from any undue reliance upon the flotation of metropolitan bonds, and to contain them within an appropriate degree.

Details of Tokyo Metropolitan Government Revenue

Details of Tokyo Metropolitan Government Revenue

Details and Trends of Tokyo Metropolitan Government Revenue

Details and Trends of Tokyo Metropolitan Government Revenue

Comparison of Revenue Breakdown

Comparison of Revenue Breakdown

Tokyo Metropolitan Government: FY2016 Settlement of Accounts
All Local Governments: FY2016 Settlement of Accounts

Local Tax System

Local Tax System

Note 1: ■ indicates metropolitan tax.

Note 2: Those marked with an asterisk are metropolitan taxes in the 23 special wards. Municipal inhabitant tax applying to corporations is imposed as metropolitan tax in the 23 special wards.
● indicates that the tax is not levied in Tokyo Metropolis.

Note 3: Accommodation Tax, which is a unique tax levied by the TMG, is a prefectural discretionary special-purpose tax.

Note 4: Special Land Possession Tax has been suspended since fiscal 2003.

Breakdown of Metropolitan Tax Revenue for FY2016 (composition ratio)

Breakdown of Metropolitan Tax Revenue for FY2016 (composition ra

Note 1: Figures shown have been rounded off. The total amount of the estimated tax revenue may not agree with the sum of the individual taxes.

Metropolitan Tax Revenue Trends (1995–2016)

Metropolitan Tax Revenue Trends (1995–2016)


The expenditure of the metropolitan government has significant differences from the expenditure of other local authorities. First, the government is responsible not only for the administration at a prefectural level but also for part of the administration in the ward area, which elsewhere would be carried out at the municipal level.

Another important difference is the special ward financial adjustment allocations, an expenditure item found only in Tokyo. The special ward financial adjustment system aims to have financial resources related to the metropolitan administration fairly distributed between the metropolitan government and the 23 special wards, as well as to correct the imbalances between the 23 special wards in their fiscal strengths and ensure that they can provide an adequate level of public services.

When expenditure is viewed by type, personnel expenses constituted approximately 20% of total expenditure in fiscal 2016; the majority of this is the staff salaries of the police and fire departments, schools and other personnel directly concerned with the lives of Tokyo’s residents. Ordinary construction costs accounted for about 10% of total expenditure. These are the costs to build social infrastructure such as roads and bridges, and facilities including schools and social welfare facilities. In addition, subsidies and other expenditures, which include allocations to the special wards for financial adjustments and subsidies for facility operation costs, also made up a large proportion.

Introduction of a New Public Accounting System

Adding to the existing cash-basis accounting system, which corresponds to the budget system, in FY2006 the Tokyo Metropolitan Government (TMG) established double-entry bookkeeping and accrual-basis accounting standards that take into consideration characteristics particular to public administration. This was a first in Japan. Based on this financial accounting system unique to the metropolitan government, financial statements prepared in accordance with corporate accounting practices are released in the TMG Annual Financial Statements and other mediums.

(1) Balance Sheet (FY2016)

(1) Balance Sheet (FY2016)

(2) Statement of Operating Costs (FY2016)

(2) Statement of Operating Costs (FY2016)


Challenges Facing Metropolitan Finances

Although gradual recovery of the Japanese economy is anticipated to continue as employment and income environments continue to improve, future economic trends must be watched carefully. This includes the escalating trade tensions between the United States and China, and other concerns over the global economic climate, and the impacts of financial and capital market fluctuations.

Moreover, although metropolitan tax revenues remain steady, the future is uncertain as the national government continues to work to introduce new irrational measures for redistributing tax revenues to rural governments in order to correct uneven distribution.

It is within this fiscal environment that the TMG must not only implement strategic measures to solve challenges it faces, such as eliminating childcare waitlists, addressing the needs of a super-aged society, and improving urban disaster resilience, but it must also promote initiatives to further vitalize Tokyo, the engine driving the Japanese economy, such as by cultivating and strengthening growth industries and bolstering urban functions that underpin economic activities.

At the same time, as preparations for the Olympic and Paralympic Games Tokyo 2020 enter the final stages, the TMG must do all possible to ensure the success of the Games and to build a legacy. Measures must also be aggressively implemented for the sustained growth of all of Japan through cooperation and tourism promotion with regions throughout the country.

To that end, along with continuing to engage in self-reform to enhance policy efficiency and effectiveness, it would be necessary to manage finances in a sustainable manner that can address changes in the social structure by employing metropolitan bonds and funds in a methodical and strategic manner and making the financial base more robust and resilient from a medium- to long-term perspective.

Moreover, to counter the national government’s unreasonable claims to Tokyo’s coffers, Tokyo will unite in its efforts to spread understanding and interest in this matter, while also cooperating with other prefectures, with the goal of properly transforming the local tax system. Efforts will be made to expand local tax resources to match local government tasks and responsibilities by promoting the transfer of tax revenue sources from the national government to local governments.

Details of Tokyo Metropolitan Government Expenditure (by Purpose)

Details of Tokyo Metropolitan Government Expenditure (by Purpose


Details of Tokyo Metropolitan Government Expenditure (by Type)

Details of Tokyo Metropolitan Government Expenditure (by Type)


Details and Trends of Tokyo Metropolitan Government Expenditure

Details and Trends of Tokyo Metropolitan Government Expenditure


Expenditure Breakdown Comparison

Expenditure Breakdown Comparison

Tokyo Metropolitan Government: FY2016 Settlement of Accounts
All Local Governments: FY2016 Settlement of Accounts

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