The Tax Commission plans to recommend in its fiscal 2006 tax reform proposals that the government abolish the 1999 income tax cuts at both national and local levels in January 2007, and some corporate tax cuts as scheduled in March, Commission Chairman Hiromitsu Ishi said Tuesday.
The commission, an advisory panel to Prime Minister Junichiro Koizumi, has given the green light on ending the tax cuts given the sustained recovery of the economy and the need to gain control over the government's debt-ridden finances, Ishi said after the commission meeting.
The panel also plans to recommend that the government allow auto-related tax revenue earmarked for road construction and revenue from other special-purpose taxes to be used for broader policy goals, such as partly covering social security costs, which continue to snowball amid the rapid aging of the population.