The Argument Regarding Local Consumption Tax Increase

The Argument Regarding Local Consumption Tax Increase

(Oita Godo Newspaper, July 15th 2009, morning paper)

A national conference with prefectural governors was held in Ise City, Mie Prefecture, on August 15th. The leaders were having a debate about the proposal to increase the 1% proportion of consumption tax which is currently being distributed to local prefectural governments, in order to resolve the issue of severe capital shortage in of the local autonomous entities.

In the the proposal, it was pointed out that the capital shortage of local autonomous entities will probably reach 1,300,000,000 Yen by 2012, and it will result in the collapse of public finance in the regions. To maintain government administration service, the increase in stable revenues in each prefecture coming from the consumption tax in the prefecture will be necessary.

In the conference, it was also discussed about the establishment of 'Strategic Council' consisting of ten prefectural governors, to provide assistance to further increase the potential of the proposal being considered.

Comment: This issue is currently being debated and the decision will indeed have a significant impact on Japan's economy. I hope that the leaders would eventually arrive to a wise decision, to maximize the benefits and to minimize the costs for the good of the country as a whole and also for each prefecture.

NUGROHO Katarina Marsha Utama

Indonesia

Ritsumeikan Asia Pacific University, APM