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Saturday, Feb. 2, 2008

DIESEL COSTS CAN'T BE PASSED ON

Trucking exec hits continued high fuel tax


Staff writer

As crude oil prices surge, the provisional tax rates on gasoline and other fuels should be eased, especially those on pricey diesel oil burdening the land transportation industry, according to Akio Yajima, managing director of the Japan Trucking Association.

News photo
Akio Yajima, managing director of the Japan Trucking Association, speaks at the group's head office in Shinjuku Ward, Tokyo, on Thursday. SATOKO KAWASAKI PHOTO

"There is debate in the government that auto-related taxes should partly be used for expenses other than road construction. . . . This discussion itself proves it is no longer urgent to construct highways. That is why we are saying the tax rates should go down," Yajima said.

The Japan Trucking Association, which comprises about 50,000 trucking companies, and other related industries meanwhile oppose spending road-designated tax revenues on such outlays as social welfare services. The group says such services should be financed by a broader range of taxpayers instead.

On Dec. 1, the trucking association and 22 other groups, representing automakers, parts makers, car importers, bus drivers and petroleum companies, collected more than 10 million signatures from drivers who want gas prices to go down.

The Liberal Democratic Party-New Komeito ruling bloc wants to extend the provisional tax rates, which have been in place for decades, for another decade.

But the diesel fuel tax hike is particularly problematic because truckers have weak positions with consignors. Thus transportation firms have a hard time charging higher fees when energy costs jump, Yajima said.

"We have been asking the government to reduce the provisional tax on diesel oil that could not be passed on through transportation fees," the former transport ministry official said.

The association is also calling for emergency measures to deal with the record-high fuel price.

"Since the energy tax burden is so heavy, we want the government to reduce the tax on diesel oil, for example, by ¥10 per liter, at least until oil prices subside," he said.

More than 90 percent of Japanese trucks are diesels. After the gasoline tax was raised on a "provisional" basis in 1974, the government imposed a higher tax on diesel oil in 1976.

The gasoline tax, revenues from which go to both the central and local government coffers, is ¥53.8 per liter, or ¥25.1 higher than the fixed tax of ¥28.7 per liter. The tax on diesel oil is ¥32.1 per liter, or ¥17.1 above than the original rate of ¥15.0.

On Sunday, about 3,500 truck drivers rallied in eight prefectures, calling for cutting the provisional tax on diesel oil and for raising freight charges to deal with rising crude oil prices.

Long-distance drivers are suffering from the sharp rise in diesel fuel costs. Over the last four years, energy fees for the entire industry have risen by more than ¥600 billion, the association said.

According to a survey the association conducted in November, 61 percent of trucking firms could not hike fees despite the oil price spike.

The Democratic Party of Japan wants the provisional tax rates abolished and remaining auto-related taxes earmarked for the government's general account, but Yajima doesn't agree with this stance.

"It costs a certain amount of money to maintain and manage the existing highways," he said.

Yajima admits there are many rural calls for more roads, but he said such construction isn't always urgent.

"I want the DPJ and LDP to hold discussions from a broad point of view for the next two months (before the provisional rates expire on March 31)," he said.



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