Funding for Gasoline Surcharge Abolition to Be Put Off by 1 Year

Tokyo, Nov. 5 (Jiji Press)–Japan’s ruling and opposition parties formally agreed Wednesday to scrap the provisional gasoline tax surcharge Dec. 31 while putting off a decision on how to secure stable alternative revenue sources by about a year. The agreement was reached at a meeting of working-level officials from the ruling Liberal Democratic Party, its new 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. The six parties also agreed to scrap the provisional surcharge on the gas oil transaction tax April 1 next year. The surcharge stands at 25.1 yen per liter for gasoline and 17.1 yen for gas oil. They aim to pass bills to remove the surcharges during the current extraordinary session of the Diet, the country’s parliament, scheduled to run until Dec. 17. The abolition of the extra tax rates will be pillars in an envisioned package of measures to tackle inflation. To make up for the expected revenue drop of about 1.5 trillion yen from the abolition, the six parties will consider cutting government expenditures, scaling down special tax cuts for corporations and raising taxes on high-income earners, aiming to reach a conclusion by year-end, according to the agreement. In addition, they will discuss details of potential stable revenue sources for about a year in order to prevent the revenue shortfalls from affecting maintenance work and measures against aging for roads and related infrastructure. Meanwhile, as temporary measures until the abolition of the surcharges, subsidies to lower gasoline and gas oil prices will be raised in stages from Nov. 13. The financial aid is expected to reach the same level as the surcharge on Dec. 11 for gasoline and Nov. 27 for gas oil. END [Copyright The Jiji Press, Ltd.]