The internal affairs ministry said Thursday it is sticking with its decision to exclude the city of Izumisano from the revised furusato nōzei hometown tax donation system.

The ministry concluded again that the Osaka Prefecture city, does not qualify after failing to follow a ministry request to limit return gifts to donors to local specialties worth up to 30 percent of the value of each donation.

The ministry notified the city of the decision Thursday.

It reached the conclusion after a review based on a recommendation by a third-party dispute settlement panel that the policy be reconsidered as it may be illegal.

“The conclusion came after a proper review,” Chief Cabinet Secretary Yoshihide Suga told a news conference.

But the Izumisano Municipal Government said it cannot accept the ministry’s decision.

“The decision effectively ignores the recommendation by the panel and makes light of local autonomy,” the city said in a statement.

“We are totally unconvinced. If we are to move on to the next stage, it will be in a judicial manner,” said Mayor Hiroyasu Chiyomatsu, indicating the city is considering filing a complaint against the decision with a high court.

Before the revised donation system was introduced in June under the local tax law, the city collected a total of ¥33.2 billion in donations between November last year and March this year by offering lavish return gifts such as Amazon.com gift certificates.

The ministry disqualified Izumisano from the revamped donation system as it regarded the method of collecting donations, started under the original system, as problematic.

After receiving a request from the city to review the ministry’s decision, the Central and Local Government Dispute Management Council unanimously decided in September to urge the ministry to reconsider it.

While criticizing the city for jeopardizing the donation system by its controversial method of collecting donations, the council said the ministry’s decision to disqualify the city based on acts before the system was revised may overstep the confines of the law.

On Thursday, the ministry said its decision poses no problems under the taxation system as there have been similar past cases in which policy decisions were made by using past acts as a precedent.

Under the furusato nōzei system, people who make donations to local governments of their choice qualify for tax cuts.