Koizumi Standing Firm In Auto Tax Revenue Debate

by Mary Swire, Tax-News.com, Hong Kong

14 September 2001

It was revealed recently that despite opposition from his Construction and Transport Minister, Japanese Prime Minister Junichiro Koizumi is standing firm in his determination to see revenues from motor vehicle tonnage taxes incorporated into general government revenues. Under the current system, the Transport Ministry have sole control of the revenue, which is used for road construction and improvement.

Understandably, the Transport Minister, Chikage Ogi, is reluctant to let go of the purse strings, and in a meeting at the Prime Minister's official residence on Tuesday, is understood to have refused Mr Koizumi's request. 'It is acceptable for the Construction and Transport Ministry to use such revenues for other purposes, but the proposal is unacceptable,' she said at the reportedly heated meeting at which the Japanese Finance Minister, Masajuro Shiokawa was also present.

It is expected that Prime Minister Koizumi will also face opposition from Liberal Democrat lawmakers, who have a stake in road construction projects and would also lose out if the Prime Minister achieves his aims.

However, Mr Koizumi seemed unabashed by the encounter, and told the Japanese press on Tuesday evening that he would do anything to accomplish his goal. '(Ogi) walked out on me, saying "I won't accept the plan",' he revealed. 'But you won't be able to accomplish anything if you only put forward old arguments under these unusual circumstances. ' He added: 'No plan ever would be carried out if it were not put into action as quickly as possible.'

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