Because the Diet failed to enact the fiscal 2008 tax-code bill on and before March 31, gasoline prices automatically went down April 1 as the period for the "temporarily" raised gasoline tax rate expired. The bill, in part, maintains the surcharges for the gasoline and other road-related taxes. The Upper House, controlled by the opposition, had delayed interpellation on the bill for more than a month. The ruling camp plans to enact the bill by taking a second vote in the Lower House with a two-thirds majority in late April.
But if this happens, the system under which revenues from the road-related taxes are used exclusively to fund road-related projects will be revived. The opposition Democratic Party of Japan calls for freeing up the tax revenues so the money can be used for general purposes. It also calls for immediately scrapping the surcharges. The government has a 10-year, ¥59 trillion road construction plan. The DPJ pointed out that the plan is not based on the latest traffic volume projection and says that its budget should be reduced.
Prime Minister Yasuo Fukuda on March 27 made a bold proposal to let road-related tax revenues be used for general purposes from fiscal 2009 and to scale down the 10-year plan to a five-year plan. But he opposed lowering the gasoline tax rates to normal because he is concerned about a loss of tax revenues.