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OSAKA — The Osaka chapter of the Liberal Democratic Party — which recently proposed a bank tax — has been slow to support an Osaka Prefectural Government plan to double a tax charged on corporations that operate in the prefecture, it was learned Tuesday.

The proposed tax would be imposed for three years starting in fiscal 2001.

Kazumasa Moriyama, secretary general of LDP assembly members, said it is not a good idea to levy a new tax on companies, many of which are in the red.

“We will wait and see what the prefectural government can do to ease the burden on the companies up until February, when the new tax bill will be submitted to the assembly,” he said.

The LDP, with 43 seats, is the largest force in the 112-seat assembly.

The plan would apply to taxes imposed on companies in the prefecture in accordance with their capital, as opposed to their income.

This is expected to provide the prefectural government with a stable annual increase in revenue of 6.1 billion yen, prefectural officials said.

Some 60,000 firms in the prefecture with capital of more than 10 million yen will be affected by the plan. The plan would not apply to the 170,000 companies with capital of 10 million yen or less, 70 percent of which are in the red, the officials said.

Although Gov. Fusae Ota, who announced the plan Monday, said the tax plan would not affect the local economy, about 46 percent of the 60,000 companies to have their taxes raised are also in the red.

Yoshihisa Akiyama, chairman of the Kansai Economic Federation, said that the plan would not be easily accepted by the companies unless the prefectural government tries harder to advance administrative reform.

Wa Tashiro, chairman of the Osaka Chamber of Commerce and Industry, was also skeptical of the plan because its role in the prefecture’s restructuring was not clear.

The prefectural government’s revenue from corporate taxes has dropped by more than half from its peak of 835 billion yen in fiscal 1989. Revenue for the current fiscal year is expected to reach just 393 billion yen, resulting in a revenue shortfall of 530 billion yen for the year.

To increase local tax revenues, the prefectural assembly in May passed a bill to impose a 3 percent tax for five years on the gross profits of major banks operating in the prefecture.

The move is expected to bring in about 7.5 billion yen annually from next April.

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