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2009年10月 1日 (木)

暫定税率廃止 財政にも環境にもよくない

The Yomiuri Shimbun(Sep. 28, 2009)
Abolition of provisional tax rates doesn't add up
暫定税率廃止 財政にも環境にもよくない(9月28日付・読売社説)

A fall in gasoline prices is good news for drivers. But how will the government fill the huge pothole created in its finances due to cuts in road-related taxes?

Finance Minister Hirohisa Fujii recently announced that the government will abolish provisionally higher rates for gasoline, light oil delivery and other road-related taxes in April next year.

This means retail gasoline prices would drop by 25 yen per liter. On the other hand, the central and local governments would lose a total of 2.5 trillion yen in revenues from these taxes, which is equivalent to 20 percent of the revenues accruing from the consumption tax.

The Cabinet of Prime Minister Yukio Hatoyama has set a midterm goal of reducing greenhouse gases by 25 percent from the 1990 levels by 2020. The abolition of the provisionally higher tax rates would run counter to the administration's initiative to tackle global warming. The government should retract its policy of repealing the provisionally higher tax rates.


Fiscal condition parlous

In March last year, the Democratic Party of Japan opposed a planned extension of the provisionally higher tax rates, saying the party would protect people's livelihoods by reducing gasoline prices. As a result, the provisionally higher tax rates were temporarily removed after the law governing their establishment expired in April last year. The rates were restored after a bill to reinstate them passed the Diet with the then ruling parties of the Liberal Democratic Party and New Komeito resorting to a second vote at the House of Representatives about a month later.

Since then, the DPJ has put the policy of abolishing the provisionally higher tax rates on its front burner. The party's decision to scrap them from next fiscal year while keeping on a short leash some of its members who take a cautious approach on the matter apparently comes from its calculation that it can appeal to the public by presenting the abolition as an achievement of the new administration ahead of the House of Councillors election next summer.

But the nation's fiscal condition means the state cannot stand such a big loss in resources. Due to a series of economic stimulus measures, new government bond issuance in the current fiscal year reached 44 trillion yen, and it seems certain that tax revenues will fall further below the initial projection.

The DPJ has said the government can make up for a fall in tax revenues by cutting wasteful spending, adding that local governments will not suffer from this policy. But concrete measures in this regard remain unclear.


Review road budget

Starting from this fiscal year, road-related tax revenues are allocated for general purposes, with the result that revenues from the gasoline tax and other taxes can now be used for public welfare, health care and education. In the current fiscal budget, however, 90 percent of tax revenues were earmarked for the road budget, just as before. The promised allocation of road-related tax revenues for general purposes now looks like an empty slogan.

First and foremost, the new administration should closely reexamine the road budget and throw its energies into realizing a plan to allocate road-related tax revenues for general purposes in both word and deed.

The DPJ considers it problematic that the surcharges that were temporarily added to the basic rates to fund road construction remained in place for as long as 35 years. If that is the case, it should discuss recasting the provisionally higher tax rates as basic rates.

Some DPJ members envisage a plan to abolish the current provisionally higher tax rates and create a new tax aimed at slowing global warming that would in effect make up some of the revenue shortfall left by the scrapping of these surcharges. To reduce greenhouse gases emitted from factories, the DPJ is believed to be planning to moot a new, environment-related tax to be applied to the industrial sector.

But new taxes could dampen the vitality of the country's business community. The hasty introduction of such new taxes should be avoided.

(From The Yomiuri Shimbun, Sept. 28, 2009)
(2009年9月28日00時52分  読売新聞)


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