Japan Gasoline Tax Surcharge to be Scrapped at Year-End

Tokyo, Oct. 31 (Jiji Press)–Japan’s ruling and opposition parties agreed Friday to scrap the provisional gasoline tax surcharge at the end of December. The agreement was reached by the ruling Liberal Democratic Party, its coalition partner Nippon Ishin no Kai (Japan Innovation Party), the leading opposition Constitutional Democratic Party of Japan, the Democratic Party for the People, Komeito and the Japanese Communist Party at a working-level meeting. The pact calls for raising in steps from Nov. 13 subsidies paid to oil wholesalers for lowering pump prices to 25.1 yen per liter, the level matching the add-on gasoline levy, by Dec. 11 before scrapping the surcharge on Dec. 31. The parties will sign a formal agreement as early as next week and revise a bill they jointly introduced in August to abolish the levy so the revised bill can be enacted during the ongoing extraordinary session of the Diet, the country’s parliament. The extra diesel fuel tax, set at 17.1 yen per liter, will also be scrapped on April 1 next year after government subsidies are increased to offset the levy by Nov. 27. As the central and local governments are expected to face tax revenue falls by about 1.5 trillion yen in total after the tax surcharges are eliminated, the six parties will try to find out how their expenditures can be reduced and finish reviewing special tax measures for companies and tax burdens on high-income earners by the year-end. The add-on gasoline tax was introduced in 1974 as a temporary measure chiefly to fund road construction and maintenance. The government started spending on roads from the general account in 2009. But the levy has been in place as a stable, multi-purpose funding source since then. The parties aim to reach a conclusion on securing another stable income source within the next year while planning to make up for funding shortfalls with nontax revenues, among others, in a way that does not impact regional fiscal stability. END [Copyright The Jiji Press, Ltd.]