The government and the Liberal Democratic Party have decided to drop the maximum income tax rate from the current 65 percent to 50 percent, a senior official of the ruling party reportedly said Friday.
A 4 trillion yen reduction in income taxes by 1999 is also being mulled that would manifest itself either through a permanent cut or in combination with a one-time cut, the unidentified official said.
The official said the government is not yet planning on compensating for the resulting shortfall in revenue by initiating hikes in other taxes. As it stands now, the current maximum rate is a 50 percent national income tax in combination with a 15 percent local tax.
How the government will handle the revenue shortfall has not been explained yet, but officials of the Finance Ministry said earlier that the government may have to issue bonds if the prime minister is to keep his promise.
On the JR Oito Line, which runs through Nagano and Niigata prefectures, a two-car train derailed Friday after a mudslide blocked a portion of the tracks.