Parties agree on bill to extend tax rates

The ruling and opposition camps on Friday agreed to pass a stopgap bill to extend "temporary" tax measures until the end of May--with the exception of road-specific taxes, such as the gas tax.

The two camps remain split over road-related taxes, despite Prime Minister Yasuo Fukuda's attempt the previous day to break the impasse. The feud makes it all but certain that higher gasoline and other road-related tax rates will expire on Monday.

Opposition Minshuto (Democratic Party of Japan) has demanded that the temporary higher road tax rates be abolished. Fukuda said such a measure was "unrealistic."

But the two sides decided Friday to separate the road taxes from all other tax measures that will also expire at the end of March. They will pass the stopgap bill in the Upper and Lower houses of the Diet on Monday, the last day of the current fiscal year.

The bill will cover tax rates on registration licenses for land transactions, as well as duties on alcohol and cigarettes that travelers bring into Japan from overseas, among other goods.

If the bill is passed, the current lower tax rates in these areas will continue beyond April 1.

The agreement came after Lower House Speaker Yohei Kono and Upper House President Satsuki Eda met with senior members of ruling and opposition parties Friday.

Kono asked that concessions be made on tax measures other than the road-specific ones to prevent confusion and inconvenience among the public if those special measures were to expire.

A draft of the stopgap bill was proposed by the ruling coalition Thursday.

Fukuda on Thursday also offered to convert road tax revenues to the budget for general use, but he would not agree to the abolition of the rates.

The two sides also agreed Friday that passage of the stopgap bill will not mean that the government's tax system reform bills for 2008 have been turned down. If the temporary gas tax rate expires Monday, prices of gas at the pumps will likely eventually drop by 25 yen a liter.(IHT/Asahi: March 29,2008)