Japan’s government is considering introducing a new tax to secure funding for the repair of aging public infrastructure to replace a decades-old gasoline surcharge to be abolished by the end of the year, the Asahi newspaper reported on Monday.

The potential new levy is likely to target car drivers, replacing the so-called “provisional” gasoline tax which Japan’s ruling coalition agreed with the opposition to abolish “at the soonest this year.”
The provisional tax, introduced in the 1970s originally as a temporary step to fund road building and maintenance, adds 25.1 yen ($0.17) per litre to the base rate of 28.7 yen. The end of the tax would mean a loss of about 1 trillion yen annually in general tax revenue.

The finance ministry and internal affairs ministry will be drafting initial plans, which may include new fuel-based taxation, the Asahi reported, without citing sources. Revenues would be distributed to local governments, which bear the bulk of infrastructure maintenance costs, it said.

But the new tax could draw criticism from opposition lawmakers as merely a rebranding of the expiring gasoline levy that undermines efforts to ease the burden on consumers amid rising living costs, the Asahi said.

The Ministry of Finance did not immediately respond to a request for comment on the report.
Source: Reuters