The chairman of the Japanese Bankers Association on Monday again criticized a Tokyo draft ordinance that aims to tax the gross profits of large banks in the metropolis as "unfair and undemocratic."

Speaking as a witness in the first of four hearings at the metropolitan assembly's special budget committee, Katsuyuki Sugita lashed out at a process that enabled the capital to develop the plan without interference and suddenly announce it to residents. The legislature looks likely to pass the legislation.

The plan will levy a tax of up to 3 percent on about 30 banks that have total assets of 5 trillion yen or more, beginning April 1. The proposal has raised wide support among residents as a means to secure revenue from banks, which have not paid local taxes because they are in the red due to huge amounts of nonperforming loans.

"A small group of people worked on the plan behind closed doors, sprang it on taxpayers, denying them time to be informed and convinced, and decided on the plan in a blitz," said Sugita, who is also president of Dai-Ichi Kangyo Bank.

Sugita further reiterated the association's concerns that the plan violates the constitutional principle of fairness of taxes.

"There are 500,000 companies that also receive administrative services in the city, but the new tax only targets 30 banks," Sugita protested, labeling both the tax rate and its targets as "arbitrary."

The association claims that the 24 member banks that would be taxed under the plan will have to pay in total 60 times more taxes in fiscal 2000 than in the previous year.

Sugita later told reporters the bank tax plan has legal problems and that the association will consider filing suit against the metropolitan government if the assembly passes the draft ordinance. as scheduled on March 30.

Another speaker at Monday's session, Naohiko Jinno, professor of economics at the University of Tokyo, said, "The tax is a desperate measure by Tokyo, acting within its very limited power (as a local government) to tax," Jinno said. adding that tax revenue must be transferred from the central to local governments.

While criticizing the industry for its high salaries and failure to restructure, the third speaker, Miyagi University professor Shigeru Itose, expressed concern over the way the bank tax plan was promoted.

"The tax taps into widespread resentment among the public, and labels banks as the bad guys," he said. "This is dangerous populism."