Japan's ruling, opposition parties to set up panel on road tax revenues

TOKYO, April 16 (Xinhua) -- The Japanese ruling and opposition camps arrived at an agreement Wednesday that a panel will be set up for negotiations on appropriating road-related tax revenues for general expenditures.

The accord came after the ruling bloc made a proposal to the opposition parties earlier this week for launching negotiations over assigning the road-related tax revenues, which currently earmarked for road building, to general expenditures as from fiscal year 2009.

The panel, scheduled to hold the first meeting Friday, is not likely to discuss issues concerning the reinstatement of gasoline and other road-related tax surcharges.

On March 31, the two blocs failed to reach an agreement on the extension of higher gas tax and other road-related taxes, and the gas tax was thus cut by 25 yen per liter as of April 1.

The ruling coalition hopes to revive the higher tax rates in late April through a lower house vote. Under Article 59 of the Constitution, the gas tax bill, which was submitted to the upper house on Feb. 29, can be sent back to the lower house if the upper house does not hold a vote on it within 60 days. The bill will become law once the lower house votes by a two-thirds majority for it.

If the revenue-related bills win the Diet's endorsement late April, the revenue shortfall will be limited to one month at somewhere between 100 billion and 200 billion yen (about 985 million and 1.97 billion U.S. dollars). And gas prices will fall in April and then restore the current level some one month later.