Finance Minister Hiroshi Mitsuzuka on Oct. 8 ruled out the possibility of implementing special income tax cuts to help stimulate the economy, saying such a move would worsen the nation's fiscal condition.Speaking at a news conference, Mitsuzuka pointed out that such tax breaks would have to be financed through deficit-covering bonds, but the government is obliged to reduce such bond issues by 1.25 trillion yen a year for the next six years.A bill is now in the Diet that would put into law the government's target of reducing the deficit to no more than 3 percent of the gross domestic product and stopping issuance of deficit-covering bonds by fiscal 2003. "Income tax cuts cannot be considered, given the (government's) plans to follow the spirit of this law," Mitsuzuka said.Calls are mounting within both the ruling and opposition parties to consider slashing income taxes to spur personal consumption and buoy the economy, which some observers fear has begun to lose steam. But the Finance Ministry is against any pump-priming steps that would lead to a further deterioration of the nation's fiscal situation.Mitsuzuka stressed that the government and the ruling Liberal Democratic Party are currently working on an economic stimulus package focused on steps such as accelerated deregulation, increasing land liquidity and revising some taxes such as corporate taxation.
