The ruling parties rammed through the Lower House last week the fiscal 2008 budget bill and the tax-code bill, which includes maintaining the provisionally raised gasoline and other road-related tax rates for 10 years. Although the opposition forces controlling the Upper House can kill the tax-code bill, doing so would cause great confusion in people's lives. It is essential that ruling and opposition forces reach a compromise on the bill.
Under constitutional provisions, the Lower House vote on the budget bill takes precedence over Upper House action. But if the Upper House turns down the tax-code bill, the Lower House must pass it for a second time, by a two-thirds majority.
The government plans to spend ¥59 trillion for road-related projects for the next 10 years by using revenues from the road-related taxes. But the Democratic Party of Japan calls for turning revenues from the road-related taxes into general revenue sources, not restricted to use in road-related projects, and scrapping the provisionally raised portion of the tax rates, which would mean a annual tax revenue loss of ¥2.6 trillion.
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