The ruling Liberal Democratic Party decided Monday that it will not carry out a large-scale income tax cut this year, ruling out the possibility that such a measure will be included in a planned economic stimulus package.
Senior executives of the LDP also agreed that the package -- the basic framework for which is to be announced this week -- will be within the limit of the Fiscal Structural Reform Law, rejecting calls for its revision to implement vigorous measures to boost the sluggish economy.
The law restricts the issuance of deficit-covering bonds and calls for the fiscal deficit to be reduced to no more than 3 percent of gross domestic product from fiscal 2003. A large-scale income tax cut cannot be conducted because it requires the issuance of deficit-covering bonds.