Tokyo Gov. Shintaro Ishihara met Kosuke Hori, home affairs minister, at a Tokyo hotel Monday evening to hear the ministry's concerns regarding the Tokyo Metropolitan Government's plan to tax the gross profits of major banks in Tokyo. Following the 15-minute closed meeting, Hori told reporters that he had asked Ishihara to give more thought to the issue. He said he had repeated concerns voiced by central government officials that it was "inappropriate to target only banks when economic recovery and financial stability are demanded." The Tokyo proposal, which was submitted to the metropolitan assembly last Wednesday, would impose a tax of up to 3 percent on the gross profits of large banks in the metropolis. A similar proposal, which would also tax banks regardless of net profit, was already under consideration by central government officials, Hori said. He questioned why Tokyo decided to move before the central government. "I stated the national government's position, but I got the impression that the governor was not going to change his mind," Hori said. Hori's ministry oversees local government finances. It was the first time that the minister and the governor have met to talk about the issue. The tax targets banks with assets of 5 trillion yen or more and will be levied for five years after taking effect in April. Tokyo officials say that the tax will bring Tokyo's cash-starved coffers a steady 110 billion yen a year. Meanwhile, Mikio Aoki, chief Cabinet secretary, said that the central government will soon clarify its position on the issue. "Prime Minister Keizo Obuchi's Cabinet," he said, "has to clarify its position toward the issue because it is a significant problem." Aoki said the government's stance would be issued following Ishihara and Hori's meeting. Meanwhile, four officials of Tokyo's Bureau of Taxation officially met with 60 members of the Japanese Bankers Association, which has been staunchly opposed to the plan. Members of the bankers association labeled the plan as "clearly unfair" and said they were unmoved by the city officials' explanations. While Ishihara's plan has drawn opposition from some Cabinet members and financial institutions, supporters state that it will help encourage local government independence and decentralization of power. Also on Monday, the National Governors' Association issued a statement urging the national government to adopt a similar tax on the gross profits of businesses "to stabilize local government's finances."
