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Wednesday, Sept. 6, 2006

Tax panel scraps report that takes Tanigaki's tack


Staff writer

Ignoring the objections of some members, the government's Tax Commission canceled publication of a midterm report on tax issues for the first time since the tax panel was launched in the late 1950s, admitting Tuesday the decision was influenced by political considerations.

This version of the report, normally published every three years, conforms closely to the positions of Finance Minister Sadakazu Tanigaki, who is running against Chief Cabinet Secretary Shinzo Abe in the Liberal Democratic Party's presidential election on Sept. 20. Abe is highly favored to win.

Tanigaki has argued that taxes need to be raised to put the government's finances in order, winning plaudits from economists. Abe, by contrast, has been noncommittal on the issue.

If released as scheduled, the midterm report would have highlighted the need to raise the consumption tax, now at 5 percent, and to overhaul the income tax system.

The report is likely to be postponed until after the Upper House election next summer.

Commission Chairman Hiromitsu Ishi, while admitting at a news conference that politics influenced the panel's decision, also said there is no rule requiring the report to be published every three years.

"(The report) should be issued with the best timing, through discussions in the commission," Ishii said.

In a meeting Tuesday prior to the news conference, members fiercely criticized the decision to scrap the report, saying it called into question the purpose of the commission, which has spent three years working on tax policy.

"We have been making decisions through many discussions. We cannot just say, 'OK, understood,' when we are suddenly told that everything has to be postponed due the political climate," one member said.



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The Japan Times

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