The governors of Tokyo and Osaka demanded Friday that the central government hand some of its tax-raising powers over to local governments in light of its plans to slash fiscal assistance for local authorities.
Tokyo Gov. Shintaro Ishihara and Osaka Gov. Fusae Ohta issued the joint appeal during a news conference in Tokyo.
The Council on Economic and Fiscal Policy, a key government panel, is expected to start debating the relationship between decentralization and the larger issue of local taxes and fiscal reforms later this month.
At issue is the so-called Trinity Reform conundrum: how to reduce subsidies to local governments; how to reform the system of tax grant allocations to local governments; and how to decentralize tax collection.
“The central government should abide by the Trinity (concept) and implement the reduction of subsidies and tax grant allocations together with the transfer of tax powers,” Ohta said.
The two governors also called on the central government to give large cities like Tokyo and Osaka special consideration when transferring tax powers, as big cities must cope with unique problems, such as those stemming from the environment and crime.
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