The government has said it is considering transferring revenue from the automobile weight tax, mainly used for road construction, into the general account.

Prime Minister Junichiro Koizumi instructed transport chief Chikage Ogi to consider the transfer as a one-time move for fiscal 2002.

The order is in line with Koizumi's campaign pledge to expand the use of special tax revenues earmarked for road construction to finance policy measures covered by the general account. The proposal is also central to his fiscal reform program.

"We need to set the pledge in motion," Koizumi told reporters following Tuesday's meeting with Ogi that was also attended by Finance Minister Masajuro Shiokawa.

The automobile weight tax is levied when automobiles are purchased or taken in for compulsory safety inspections, with 80 percent of the revenue used for road construction. For the fiscal year that started in April, the revenues are estimated at 697.8 billion yen.

In view of the opposition expected from the Liberal Democratic Party to the reallocation of tax revenues, Koizumi asked Ogi and Shiokawa to prepare proposals for how the revenues could be put to use after integration into the general account.

Ogi's response to the instruction was noncommittal, according to Koizumi.

Provisionally imposed higher rates on the auto weight tax are to be reviewed for fiscal 2003.

Securities tax change

Private-sector members of a key government panel led by Prime Minister Junichiro Koizumi have proposed that the securities tax system be drastically reformed to help revitalize the flagging stock market.

Four members of the Council on Economic and Fiscal Policy, including Masaaki Honma, an Osaka University professor, proposed that the capital gains tax for individuals be lowered from 26 percent to 20 percent.

To lend a sense of balance to the tax system, the members suggested that a uniform 20 percent tax rate be applied to income from various financial assets, including capital gains from stock trading and interest from bank deposits. The latter is currently levied a 20 percent tax.

They also called for the abolition of a withholding tax in the current two-tier capital gains tax system, which is set to be scrapped in March 2003.

The panel also includes economic ministers.