An advisory panel to the finance minister will call for "utmost efforts" to cut spending in the fiscal 2008 budget by curbing growth in social security costs, according to a draft of the recommendation.
In its proposals on spending and revenue reform, the Fiscal System Council also said the government needs to review the distribution of two local corporate taxes — the corporation enterprise tax and corporation inhabitant tax — as part of efforts to narrow disparities in tax revenues between urban and rural areas.
Revenues from the two taxes tend to concentrate in the metropolitan areas where large companies have their offices and operational bases, and thus widen the gap between densely and sparsely populated areas, according to analysts.