The Tax Commission’s Sub－Committee on Fundamental Issues met on May 20th 2003.
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1. | To start the meeting Chairman Ishi reported on a meeting to exchange opinions between members of the Tax Commission and members of the Social Security Council. | ||
2. | Regarding the forthcoming Mid-term Report of the Tax Commission, the opinions expressed in the meeting included: | ||
| i. | General | ||
 | Regaining fiscal balance should be a priority | ||
| It is necessary to consider tax and social security contributions together | ||
| ii. | Individual Income Tax | ||
| A consideration of not just policy responding to the aging society, but also how tax policy might address the falling birthrate | ||
| The possibility of scrapping the numerous existing exemptions and replacing them with a system of only one personal deduction, such as that in the US | ||
| A consideration of not just how to broaden the tax base, but also the level and increments of tax brackets | ||
| iii. | Consumption Tax and Corporation Tax | ||
| It is necessary to establish the Consumption Tax as the main pillar of the taxation system. Introduction of a reduced rate and/or earmarking of revenues for welfare expenditures is to be avoided | ||
| The fact that the Japanese people have become accustomed to the Consumption Tax should be taken account of in the Report | ||
| Taxation of corporations will continue to be examined in the light of the continuing globalization of the world economy | ||
| iv. | The relationship between national and local taxation | ||
| Regarding the reform of national treasury grants-in-aid and local allocation tax and the reallocation of tax-raising powers between national and local governments, it will be necessary to consider the reform of all three areas at once | ||
| The tax autonomy of local governments is important | ||
| v. | Environmental taxation | ||
| Revenue from any environmental taxation should not be earmarked | ||
| It will be necessary to gain the understanding and cooperation of the Japanese people considering this issue | ||
Records (in Japanese) of the meetings of the Tax Commission and its Sub－Committees can be found at http://pbcms.mof.go.jp/jouhou/syuzei/sy012.htm | |||
Further details of the fiscal year 2003 tax reforms can be found in English at http://pbcms.mof.go.jp/wce/jsp/tax2003/tax2003_tr.htm | |||
| Japanese documents, which go into more detail, can be found at http://pbcms.mof.go.jp/jouhou/syuzei/syuzei04.htm | |||
