An advisory panel to the prime minister will consider whether the new method of taxation planned by the Tokyo Metropolitan Government could be applied as an across-the-board corporate tax in all prefectures, a senior panel member said Friday. Hiromitsu Ishi, head of the Tax Commission's subpanel on local corporate taxation, was referring to gross business profit, on which the planned Tokyo bank tax will be levied. While the subpanel was split on the Tokyo plan itself, some members argued the basis of the taxation should be considered as an option for a nationwide tax, Ishi told reporters after the meeting held earlier in the day. The subpanel in June proposed the introduction of a "gaikei-hyojun" (outward standard) local corporate tax as soon as possible to stabilize deficit-ridden prefectural government revenues. A gaikei-hyojun tax would be levied based on company size, which does not fluctuate like profit, on which the current taxation scheme is based. In the June report, the subpanel suggested four options as a basis of assessment for the proposed tax, which targets all businesses and not solely banks. The options include the amount of capital and aggregate salaries of each business. The subpanel will discuss if gross business profit can be a fifth option, Ishi said. In Friday's meeting, no member called for revision of the Local Taxation Law, he said. Article 72 of the law apparently allows for the Tokyo bank tax. But Ishi, who is also president of Hitotsubashi University, personally believes the Tokyo bank tax would be "very inappropritate" because it would be levied only on banks and only in one prefecture. Still he commended the metropolitan government for taking action to secure tax revenues on its own and not simply depending on the central government. The Tokyo Metropolitan Assembly is expected to pass the tax plan by the end of March. Beginning in April, a 3 percent tax would be levied on the gross business profits of some 30 large banks operating in the metropolis. That would bring an estimated 110 billion yen a year for five years to Tokyo's coffers.
