The Tokyo Metropolitan Government on Monday appealed to the Supreme Court a Jan. 30 Tokyo High Court decision saying a tax imposed exclusively on major banks operating in the capital is illegitimate.
According to the government, the high court ruling was based on "wrong interpretations and applications of the Constitution and the local tax law."
The Tokyo High Court rejected Tokyo's appeal of a district court judgment and ordered the it to refund some 162.8 billion yen to the banks.
The tax, proposed by Tokyo Gov. Shintaro Ishihara, took effect in April 2000. Banks that have more than 5 trillion yen available for lending must pay the tax, which is levied against gross operating profits.
Seventeen banks filed a lawsuit in October 2000 with the Tokyo District Court, calling for nullification of the tax, which they claim unfairly targets banks.
In March 2002, the district court ruled in their favor and ordered the capital to pay them 74.29 billion yen.
After Tokyo appealed, the banks increased the amount of their claim to 162.8 billion yen because they had to pay levies in the following year as well.
If the Supreme Court rejects Tokyo's appeal and nullifies the tax, Tokyo will have to repay the tax revenues plus an additional 4 percent to the banks.
Tokyo has calculated that the size of the possible additional payment grows by about 23 million yen every day.