As Japan's ruling bloc managed Friday to enact the 83 trillion yen state budget for fiscal 2008 despite the rejection of the opposition-controlled upper house, their political wrangle over gasoline and other road-related taxes surfaced closely in its wake.
While the ruling Liberal Democratic Party (LDP) insists on the provisionally high tax rates to fund road construction projects, the opposition Democratic Party of Japan (DPJ) claims in the name of the consumer benefit that the levies should be lowered.
The tax revision package should take into account international trends in addressing climate change, the need for roads in outlying regions, and tight finances of the national and local government, said Prime Minister Yasuo Fukuda, who holds that the current tax rates, which were raised on a provisional basis in the1970s, help curb greenhouse gas emissions.
But the opposition DPJ repeatedly voiced opposition to the gasoline tax measure.
"Given road and economic conditions, there is no need to extend the provisional rate for the gas tax," DPJ President Ichiro Ozawa told reporters in Mito, Ibaraki Prefecture, on Friday.
While the provisional tax rates will, as scheduled, expire on March 31, neither sides seem likely to concede positions. Gas prices are thus expected to plunge 25 yen per liter, and the government stands to lose 2.6 trillion yen (2.57 billion U.S. dollars) in annual tax revenue, which spread confusion and concern nationwide.
Chances are that many of local governments will call a halt to public works as their revenue losses are projected to amount to 1.6 trillion yen.
"Prefectural residents are becoming more and more anxious each day. As some people still hope the taxation bills pass, confusion is building up in public offices," Hiroshi Hito, governor of Yamagata Prefecture, was quoted by media as saying.
As most local governments drafted their budgets for fiscal 2008 on the basis of the high gas taxes, the revenue shortfall may also adversely extend its impact to other public services as well as road construction projects.
Yoshinobu Nisaka, governor of Wakayama Prefecture, suggested that the government would have to cut budgeted funds for welfare, education and other fields to secure the budget for road-related works.
The ruling-opposition dispute also clouds the future that local governments have designed.
"Because it is hard to read which direction the central government will head in, regional governments are also unable to predict their future course," said Hideo Higashikokubaru, governor of Miyazaki Prefecture, adding that confusion in people's daily lives will also arise.
The ruling coalition, however, hopes to revive the higher tax rates in late April through a lower house vote. Under Article 59 of the Constitution, the gas tax bill, which was submitted to the upper house on Feb. 29, can be sent back to the lower house if the upper house does not hold a vote on it within 60 days. The bill will become law once the lower house votes by a two-thirds majority for it.
If the revenue-related bills win the Diet's endorsement late April, the revenue shortfall will be limited to one month at somewhere between 100 billion and 200 billion yen. And gas prices will probably fall in April and then return to the current level about one month later.
Source:Xinhua
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