Prime Minister Yasuo Fukuda hoped to break the Diet deadlock by declaring Thursday he is willing to allow revenue from road-related taxes to be freed up for purposes other than road projects in fiscal 2009, which starts in April next year.
But it remains unclear if the Democratic Party of Japan-led opposition camp will support his proposal because Fukuda remained vague over the provisionally added higher taxes, instituted in the 1970s as a temporary measure, on gasoline and other auto-related levies that have been the key bone of contention. The opposition wants the higher rates scrapped.
Yukio Hatoyama, DPJ secretary general, reportedly rejected Fukuda's proposal because it did not abolish the extra tax rates, which are set to expire Monday, the last day of fiscal 2007.