Besieged tax chief Honma steps down

Scandal-fueled exit further hurts Abe

by Hiroko Nakata

Tax Commission chief Masaaki Honma, under fire over allegations that he used his government apartment to house a lover but yet advocated the selloff of such state-subsidized properties, resigned Thursday, dealing another blow to Prime Minister Shinzo Abe’s falling approval ratings.

Honma’s resignation came just two months after he started the job and may undermine Abe’s plan to boost tax revenues by stimulating corporate growth.

Honma got the post after Abe made room for him by effectively dismissing his predecessor, Hiromitsu Ishi, who supported hiking the consumption tax, a taboo with an election looming next summer.

His resignation signals a retreat in Abe’s battle with the tax wizards in his ruling Liberal Democratic Party who are used to taking the initiative in the annual tax plan debates.

Honma tendered his resignation to Abe earlier in the day, citing personal reasons, Chief Cabinet Secretary Yasuhisa Shiozaki told reporters after Abe accepted it.

Abe has been defending his tax panel chairman since the brouhaha erupted. But he was forced to yield to mounting pressure from foes in both the ruling and opposition camps who are portraying Honma — who said he is going through a divorce — as untrustworthy.

Earlier this month, the magazine Weekly Post reported Honma was living with a woman who is not a member of his family at a government-subsidized condominium in Tokyo’s Shibuya Ward.

Honma denied he was living with the woman. He said he was dating her and in the process of divorcing his wife.

Shiozaki said Honma has already moved out of the unit.

But suspicions lingered as to why Honma, an Osaka University economics professor who lives in Osaka, was allowed to use the condominium, since he only comes to Tokyo on an occasional basis.

Responding to persistent questioning from reporters, Abe said he believed that Honma, according to the Finance Ministry, which is in charge of state assets, followed proper procedures in using the facility.

Government housing is often criticized because subsidies make their rents much lower than units in comparable central Tokyo locations.

Honma has been advocating a selloff of such assets to help trim the government’s snowballing fiscal debts. He was hit by a storm of criticism from Abe’s opponents and Cabinet ministers when the magazine article came out.

Media reports say the monthly rent for the apartment was about 77,000 yen, far lower than the estimated 500,000 yen it would cost to rent a similar unit from a private firm in the area.

Honma’s resignation isn’t likely to help Abe’s popularity. Media surveys show his support has been falling.

The numbers began dropping after Abe decided to let 11 “postal rebels,” who opposed the postal reforms of his predecessor, Junichiro Koizumi, and were kicked out of the LDP before last year’s election, return to the fold.

Honma’s possible successors include Hiroshi Yoshikawa and Noyuki Jinno, both professors of economics at the University of Tokyo.

Honma was a private-sector member of the Council on Economic and Fiscal Policy under Abe’s predecessor, Junichiro Koizumi, before becoming chief of the tax panel.

He is known as an advocate of tax breaks for companies, whereas his predecessor, Ishi, had long insisted on the need to raise the consumption tax from the current 5 percent to cope with growing social security costs.