Yokohama Mayor Hidenobu Takahide has denied claims that the city’s controversial “entertainment tax” plan unfairly punishes the politically weak by singling out unpopular businesses.
The plan, unveiled in late May, targets sex-related and gambling businesses. Critics call it a “sin tax” and question its validity from the viewpoint of fair taxation.
“I think fairness matters in terms of redistribution of tax revenues, and some kind of disparity can be allowed in levying,” Takahide said in a speech Monday at the Foreign Correspondents’ Club in Tokyo, citing the example of progressive taxes.
But then, he said, “There are some businesses I hope to see withdraw from the city as the result (of the tax).”
How and when to introduce the scheme is still under consideration, he said.
Given the shady and elusive nature of the gambling and sex-related businesses, the very practicability of the scheme is also in question.
“It is a difficult task to grasp the operation of the sex industry, and there are some questioning voices even among our staff,” he admitted. “However, I think we have to do it.”
Behind his determination to carry out the plan is the city’s difficult financial situation.
The municipal tax revenue has been on a steady decline, he said, with fiscal 2000 revenues expected to fall by 35.8 billion yen, or 5 percent, from the previous year due to shrinking corporate tax revenues. In order to boost the revenue base, the city is making efforts to invite foreign businesses, Takahide said.
“But (this) will take some time, and for the moment, we need to introduce the new tax plan targeting specific industries,” he said.
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