The government's Tax Commission is to propose a carbon tax on gasoline, coal, natural gas and other fossil fuels as a way to reduce carbon dioxide emissions in an interim report to be presented to Prime Minister Yoshiro Mori next month, commission sources said Saturday.
The report will recommend the new tax be introduced as a national tax on fossil fuels by volume, with the aim of having users of fossil fuels pay for the cost of environmental protection, the sources said.
In a report released last December, the government advisory commission called for the introduction of "an environment tax," but no specifics were revealed.
The interim report is expected to set a timetable for the introduction of the carbon tax by 2002, the year by which implementation of the 1997 Kyoto Protocol is aimed for, the sources said.
The protocol legally obliges developed countries to reduce emissions of greenhouse gases by an average of 5.2 percent from 1990 levels by between 2008 and 2012. The reduction target for Japan, one of the world's largest emitters, is 6 percent during the same period.
The report will also call for the introduction of a special-purpose local tax to make it possible for local governments to help finance the disposal of industrial waste, and as a way to cut outlays for road construction from vehicle tax revenues, spending from which is limited to road construction, the sources said.
The commission expects the reduction in spending to save money that could be used for environmental protection.
The commission issues an interim report once every three years, and the upcoming report is designed to set the groundwork for taxation in the early 21st century.