Recent wrangling over the transfer of tax revenue sources from the central government to local governments is clouding the future course of Japan's fiscal reform, analysts said Thursday.
Their comments came after the Council on Economic and Fiscal Policy finalized a reform blueprint in line with Prime Minister Junichiro Koizumi's basic reforms: promotion of decentralization by moving tax revenue sources, a review of social welfare spending and the privatization of the postal service. The reforms are aimed at keeping needy public projects and services while scrapping unnecessary ones.
It was not until Wednesday that Finance Minister Sadakazu Tanigaki and home affairs minister Taro Aso, who deals with local administrations, finally struck a deal over the amount of tax sources to be transferred.