Heavier tax and other burdens are likely to be forced on people

A prime minister's advisory panel has proposed "reform" plan forcing the working people to pay more in tax and shoulder larger share of burdens for social services, including pension schemes, while trying to reduce corporate tax.

The government Tax Commission on June 17 submitted to the prime minister recommendations for mid-term tax reforms that include an increase in the consumption tax rate to more than 10 percent from the present five percent. When the consumption tax was first introduced in April 1989, its rate was three percent.

The advisory panel has been discussing future taxation ostensibly to meet the needs of aging society with a falling birthrate, but its main focus has been to develop a justification for a drastic increase in the consumption tax rate, income tax, residential tax, and even inheritance tax.

The panel also recommended cuts in deductible amount of public pensions and income tax for wage earners, and slap a new tax on bereaved family pension and unemployment benefits.

With the catchphrase "broadening the taxation base", the panel has come up with a policy of giving favorable treatment to large corporations and wealthy people and shifting greater burdens onto those who earn less incomes due to the prolonged economic recession.

Prime Minister Koizumi Jun'ichiro denied a possibility of a consumption tax increase while he is in office but added that, "Discussing the issue is not taboo."

Chairman of the Japan Business Federation Okuda Hiroshi welcomed the atmosphere towards the tax rise, saying, "It's a responsible attitude." (end)