The government of Japan has officially launched an ambitious strategy inspired by the DOGE model to execute deep tax reforms in Japan and review state subsidies. Following the first ministerial meeting held in December 2025, Finance Minister Katayama underscored the urgency of establishing objective metrics to audit spending in the face of an imminent national revenue gap.
The cabinet formally established in November the Office for the Review of Special Tax Measures and Subsidies, staffed with 30 expert officials to lead this task. This operational unit has the critical mission of evaluating tax incentives designed for competitiveness that currently lack precise tracking regarding their actual effectiveness in the corporate economy.
In addition to Katayama, the meeting included Chief Cabinet Secretary Kihara and Internal Affairs Minister Hayashi, who agreed on the need to collect public feedback on subsidies that must be subjected to exhaustive review before the end of the current year.
This restructuring effort takes direct inspiration from the US Department of Government Efficiency, which was briefly led by tycoon Elon Musk. However, unlike the theatrical and aggressive American approach, Japan seeks to implement a process that is more methodical to achieve substantial reforms that balance fiscal resources against current complex financial realities.
The initiative arises at a highly delicate moment, as the potential abolition of provisional taxes, such as the gasoline tax, could drain around 1.5 trillion yen from annual revenues, demanding urgent alternative solutions to maintain stability.
Will Japan be able to close its fiscal gap without sacrificing corporate economic growth?
The new government body aims to eliminate inefficient taxes and superfluous spending through rigorous audits that do not rely on the traditional subjective judgments of the past. There is a specific and detailed focus on corporate tax cuts whose actual impact is unclear amidst the inflation and budgetary problems facing the Asian nation.
Therefore, policymakers want to precisely identify which incentives promote growth and which are outdated remnants that must be restructured or replaced to achieve greater long-term economic impact on public accounts.
Major reforms derived from this initiative are expected to begin formal implementation starting in the fiscal year 2027, allowing for deep and detailed analysis. This extended timeline facilitates a careful evaluation of hundreds of measures that have unique ties to various industries and stakeholders within the current Japanese system.
Finally, although the project’s nomenclature calls to mind the cryptocurrencies sector, Japan’s method stands out for encouraging transparency and seeking public understanding to validate difficult decisions regarding the national treasury.
