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The Japan Business Federation (Nippon Keidanren) said Friday a proposed environment tax carries the danger of undercutting firms’ international competitiveness.

It also requested the abolition of a tax on the pools of funds into which various firms periodically channel money to pay out benefits under their employee pension programs.

The group put forward the proposals in a report unveiled the same day in light of the planned modifications of the nation’s tax systems ahead of the compilation of the state budget for fiscal 2005.

The big-business group said Japan’s energy-related tax burden is already too heavy, calling attention to the presence of such taxes as those on gasoline and diesel oil.

It also rapped the proposal to levy the environment tax as being “thoughtless” in view of the fact that the government set aside an outlay of 1.2 trillion yen as part of the fiscal 2004 state budget to fund measures to forestall global warming.

Starting in fiscal 1999, the government froze the tax on the pools of principal paid by companies to fund their employee pension plans as well as on returns on investments of the principal on a provisional basis.

But Nippon Keidanren requested the permanent abolition of taxation on such pools of funds.

On mortgage taxes, the group asked the government to apply breaks to money that would-be home-buyers set aside prior to purchases, in addition to the current tax credits covering mortgage installment payments.

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