The ruling bloc has re-enacted a tax code bill to restore gasoline and other road-related tax surcharges by voting it in a second time with a two-thirds majority in the Lower House — a procedure provided by the Constitution. This is the first time in 56 years that such a revote was taken. The timing, just before Golden Week begins, is sure to offend many people.
The government, the Liberal Democratic Party and Komeito say that a failure to hold a revote would have led to a tax revenue loss of ¥2.6 trillion — ¥1.7 trillion for state coffers and ¥900 billion for local governments — mainly for road-related projects. The ruling bloc plans to hold another similar revote on May 13 to re-enact a bill to use revenue from the road-related taxes for road construction projects for 10 years from fiscal 2008.
While determined to go ahead with the second revote, Prime Minister Yasuo Fukuda has proposed to free up the tax revenue for general purposes from fiscal 2009. After the ruling bloc's defeat on Sunday in the Lower House by-election in Yamaguchi Prefecture, he now says that the Cabinet will officially endorse his proposal.