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Despite mounting expectations of consumers and businesses, it will be difficult for the government to carry out planned tax cuts in January, the top government spokesman said Thursday.

Business leaders have been urging the government to carry out tax cuts worth some 7 trillion yen as early as January.

Speaking at a regular news conference, Chief Cabinet Secretary Hiromu Nonaka said that due to a number of bills awaiting Diet deliberation, it is unlikely that there will be enough time for tax issues to be debated in the next extraordinary Diet session, which is slated to start at the end of the month.

Prime Minister Keizo Obuchi has a tight schedule this month, including a Nov. 11-13 summit with Russian leaders and a trip to Kuala Lumpur for the Nov. 17-18 Asia-Pacific Economic Cooperation forum meeting. U.S. President Bill Clinton and Chinese President Jiang Zemin will visit Japan later in the month.

Nonaka also said there are other topics that must be dealt with during the extraordinary session. Issues ranging from a third supplementary budget to approving members of the Financial Revitalization Commission, an independent five-member body responsible for resuscitating Japan’s financial system, await Diet deliberation. “We will make our best efforts to implement the tax reduction as early as possible,” Nonaka said. “But I’m concerned that we won’t have time to debate tax reform during the extraordinary Diet session.”

Meanwhile, the Democratic Party of Japan released a draft proposal on Thursday for an economic stimulus package worth 15 trillion yen that calls for about 10 trillion yen in tax cuts.

The DPJ plans to finalize the proposal early next week. It will urge the government to draft a supplementary budget bill based on the proposal and convene an extraordinary Diet session as soon as possible to pass the bill, party officials said.

A total of 4 trillion yen in income tax cuts would come from a uniform 2 percent cut and from raising the level of the lowest annual income taxable from the current 3.3 million yen to 4 million yen. The plan calls for increasing the government’s share of funding for the national pension plan to one-half from one-third, which would save taxpayers 2.1 trillion yen.

The DPJ plan would cut corporate taxes by 2.5 trillion yen. Tax incentives for purchasing houses and cars amount to 1 trillion yen.

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