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Saturday, Feb. 2, 2008

Gas levy vital for maintaining rural roads

Staff writer

Provisional higher tax rates for gasoline and cars are now the main bone of contention in the divided Diet. The Liberal Democratic Party-New Komeito ruling bloc has submitted a bill to extend the rates, due to expire March 31, for another 10 years. Revenues from the levies are used to build and repair roads. The Democratic Party of Japan wants the hikes abolished and remaining road tax revenues put into the general account for other purposes, including welfare and pensions.

News photo
Shimane Prefecture assemblyman Yuzo Sasaki speaks at the prefecture's office in Tokyo's Chiyoda Ward on Jan. 22. YOSHIAKI MIURA PHOTO

The Japan Times interviewed two key opposing figures in the debate: Shimane LDP assemblyman Yuzo Sasaki, who wants the rates kept, and Akio Yajima, managing director of the Japan Trucking Association, who wants the taxes cut.

In rural regions like Shimane Prefecture, where distances are great and public transportation limited, most people have little choice but to get around by car, which means the provisional taxes for gasoline and autos are vital for maintaining the roads, according to assemblyman Yuzo Sasaki.

"I want the public to know that there are still many roads that need to be built," Sasaki said. "Those roads are not unnecessary."

Last week, Sasaki organized a rally of prefectural assembly members in Tokyo to call on policymakers to retain the higher taxes. Some 450 assembly members from 44 prefectures participated.

Sasaki, who has served as a Shimane assemblyman for nearly 30 years, said in a prefecture like Shimane, where there is only one main road, construction of roads directly affects the lives of its people.

"If that main road is blocked by landslide or other natural disasters, there is no other road to make a detour," he said. "Lives cannot be saved if, for instance, an ambulance can't get through."

Rural households often have more than one car because they are largely dependent on the road network since public transportation is lacking, Sasaki said.

In addition to wanting the higher taxes continued, Sasaki also opposes the DPJ's proposal to place the road-related taxes under the general account category so the money can be allocated elsewhere.

"There are concerns that the money will not be used for road construction in such a case," Sasaki said. "Taxpayers are currently paying those taxes based on the assumption that they will be used for road-related purposes."

Sasaki also expressed concern that abolishing the provisional tax hikes will deal a severe blow to regional government coffers. Auto-related provisional tax hikes were introduced in the 1970s to build and maintain roads across the nation. Although adopted on a temporary basis, the higher rates have been in place ever since.

The use of auto-related taxes has expanded since fiscal 2003 to categories such as constructing subways and promoting low-emission vehicles. A small portion of the taxes has made its way to the general account since fiscal 2006.

According to an estimate compiled by the Internal Affairs and Communications Ministry, local governments will lose ¥906.4 billion in revenue a year if the tentative tax hikes are abolished.

Hardest hit will be Hokkaido, with an estimated loss of ¥57.8 billion in revenue, followed by Tokyo and Saitama prefectures with ¥50.5 billion and ¥41.5 billion lost, respectively. Osaka stands to lose ¥39.3 billion and Hyogo Prefecture ¥32.4 billion.

"Because local governments need to continue ongoing road-related construction, they would be forced to slash budget allocations for such categories as welfare and education," Sasaki said. "If we have to cut the budget more, we may suffer more than Yubari," he added, referring to the Hokkaido city declared bankrupt last March by the internal affairs ministry. The first city in 15 years to go bust, Yubari lost its autonomy to the central government, which now controls its rehabilitation.

"If local government coffers dry up, local residents may need to shoulder the revenue loss eventually in other forms," he said.

Local businesses will be hit hard as well, Sasaki said, adding that the number of people who work in the public works project sector in Shimane dropped by 10,000 in the last decade as the central government slashed funds for such projects. The move led to a population decrease in the prefecture, affecting city planning, he said, admitting, however, that there has been public distrust of the central and local governments for building unnecessary roads.

Sasaki harshly criticized the DPJ, which wants to abolish higher taxes, saying the party is not worthy of ruling. "The DPJ is trying to woo voter support by slashing the gasoline tax by ¥25," Sasaki said. "That is outrageous."

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