TOKYO, Mar 30: Japanese cabinet ministers on Monday dodged questions on whether the government was considering income tax cuts as reported over the weekend, repeating the official line that they were unaware of such plans."I am not aware at all of considerations by the government of an income tax cut as reported by the newspapers," said Koji Omi, the Economic Planning Agency (EPA) minister.
Prime minister Ryutaro Hashimoto also said the government's top priority for now was to get the budget for fiscal 1998-99 passed through the Upper House of parliament, and therefore he could not "say anything more than that". The comments were in contrast to those made by ruling Liberal Democratic Party (LDP) officials over the weekend suggesting an income tax cut was already in the making.
Former prime minister Kiichi Miyazawa said on a Sunday television programme that Japan needed to cut income and corporate taxes so they would be in line with other nations.
While he did not specify the kinds of tax cuts,Miyazawa said he thought 3 trillion yen ($22.9 billion) would be a good figure to complement public works spending included in the 16 trillion yen economic stimulus package outlined by the LDP last week.
Taku Yamasaki, LDP policy chief, also told a television show on Sunday that the Japanese government would decide on further tax cuts around the time leaders of the Group of Seven (G-7) major industrialised nations meet in mid-May."We will make a decision on tax cuts through discussions of the tax system by the (G7) meeting, as well as determine the contents of the 16 trillion yen plan," Yamasaki said. Asked during parliamentary discussions whether he had heard the LDP comments on television, Omi said: "I had some things I had to attend to until late into the night."
Cabinet ministers have avoided the issue of economic measures requiring fresh spending out of fear of jeopardising passage of the budget for the fiscal year starting April 1.
Opposition parties have stressed that the apparent need forfurther economic measures is proof the draft budget needs to be revised. The LDP wants to avoid such a revision.
Asked how the government felt about the LDP package, which suggested an income tax review, Omi and Hashimoto along with finance minister Hikaru Matsunaga all repeated the same line: "We will take it seriously and study it." An LDP source said last week there was consensus in the party that a one-time, two trillion yen income tax rebate carried out this year should be made permanent.
The government is expected to come up with its own version of a stimulus package by May, before the Birmingham Summit, but it will likely incorporate most of the LDP measures after the party finalises the details.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
