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 the 1970s, 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 US 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.
