Japan Diet OKs Bill to Scrap Add-On Gasoline Tax

Tokyo, Nov. 28 (Jiji Press)–Japan enacted Friday legislation to scrap the provisional tax surcharges for gasoline and diesel fuel in an effort to curb inflation, without specifying alternative sources for government funding. The add-on tax abolition bill passed through the Diet, the country’s parliament, with a unanimous vote at a plenary session of the House of Councillors, the upper chamber of the Diet. It cleared the House of Representatives, the lower chamber, on Tuesday. The legislation calls for the abolition of the gasoline tax surcharge of 25.1 yen per liter on Dec. 31 and the diesel surcharge of 17.1 yen per liter on April 1 next year. Meanwhile, its supplementary clause urges the central government to work out concrete measures to make up for an estimated overall annual tax revenue shortfall of 1.5 trillion yen in the country in about a year after the law takes effect so as not to add to fiscal burdens on local governments, which are given part of the surcharges as tax grants. The original surcharge-scrapping bill was introduced by the opposition camp in August. But as the Nov. 1 abolition deadline stipulated in the bill had passed, six ruling and opposition parties jointly amended the bill to make it a bipartisan proposal. In a related development, the central government has been increasing subsidies for oil wholesalers to promote a gradual pump price decline to levels without the add-on gasoline tax while the Upper House’s Financial Affairs Committee has adopted a resolution calling for keeping intact subsidies to bus and trucking businesses after the elimination of the diesel tax surcharge. END [Copyright The Jiji Press, Ltd.]