With the loss of the ruling coalition’s Upper House majority in Sunday’s election, the Liberal Democratic Party-led minority government faces increasing pressure to decide whether to abolish a provisional gasoline tax as demanded by opposition parties, which now hold a majority in both chambers of parliament.
On Friday, the parliamentary affairs chiefs of five opposition parties — the Constitutional Democratic Party of Japan (CDP), Nippon Ishin no Kai, the Democratic Party for the People, Reiwa Shinsengumi and the Japanese Communist Party — confirmed they would introduce a bill to abolish the tax to be taken up during an extraordinary session of parliament, which is set to take place between Aug. 1 and 5.
That came after the policy chiefs of eight opposition parties — including Sanseito, the Conservative Party of Japan, and the Social Democratic Party — agreed to submit the bill as early as possible.
“If the bill can be submitted (in August), we will submit it and decide whether to vote on it. But I think it would be better to involve the ruling parties. If we do, we’d need to reach complete agreement on the timing of the bill’s implementation and funding sources,” Yoshihiko Noda, the leader of the main opposition CDP, told reporters Friday morning ahead of the agreement by the five opposition parties.
While Noda hopes for the tax to be abolished as soon as the end of this year, he acknowledged that there is a need for practical discussions over the preparations that gas stations need to make before that.
It’s unclear how Prime Minister Shigeru Ishiba’s government would respond if the bill is debated.
The opposition camp is looking to pass the bill as soon as possible in order to ease consumer burdens at the pump. But the ruling coalition is concerned about rushing into a decision and worried about the loss of tax revenue that would result from the abolishment of the tax.
Seven opposition parties had jointly submitted a bill to abolish the gasoline tax during the parliamentary session that ended in June.
Although it cleared the Lower House, the bill was not debated in the Upper House, where the ruling parties still maintained a majority before parliament ended on June 20, and was scrapped.
The government estimates that abolishing the tax would result in a loss of ¥1.5 trillion ($10.2 billion) in tax revenue, which is needed for nationwide road and transportation infrastructure projects. It is worried about where the replacement funding might come from.
On Wednesday and Thursday, the National Governor’s Association called on the central government to ensure stable sources of revenue for both national and local governments by securing alternative permanent sources of revenue if the gasoline tax is abolished.
The provisional gasoline tax rate is ¥25.1 per liter. On Thursday, the trade ministry announced a retail price of ¥173.6 per liter for regular gasoline as of July 22, which marked the first increase in three weeks.
With opposition parties uniting in both chambers of parliament to push for the abolishment of the tax as soon as possible, the issue will likely become the first major test of the LDP-Komeito coalition following its loss of control of the Upper House.
The eight opposition parties collectively hold 111 seats in the 248-seat Upper House. They will need to secure support from 13 of 15 unaffiliated members, including one from Team Mirai, in order to pass legislation with a majority. In the Lower House, they already hold a slight majority.
Ishiba faces a number of difficult choices for the upcoming extraordinary session of parliament as well as the longer autumn session, during which a supplementary budget will be debated. His minority government must secure votes from at least one opposition party if it is to get the budget and legislation passed, which add to the pressure faced by the ruling coalition to quickly decide how to respond to the opposition push to abolish the gasoline tax.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.