Deputy Prime Minister Naoto Kan said Tuesday the government should begin a full scale study on introducing a taxpayer identification system and consolidating tax-related agencies in an effort to streamline the pension and social welfare system.
A fair and transparent tax system is needed because the financial burden from social welfare services is expected to grow amid the declining birthrate and aging population, Kan said at a news conference.
"I believe we should examine a taxpayer identification system, which has been discussed for a long time, with an eye to introducing it in earnest," said Kan, who is also fiscal and economic policy minister.
He said a tax identification system should be studied in line with the Democratic Party of Japan's plan to consolidate the Social Insurance Agency and the National Tax Agency so the government can manage pensions and taxes more efficiently.
Currently, the Social Insurance Agency is responsible for pensions, the National Tax Agency handles national taxes and municipalities collect local taxes.
The system "is extremely insufficient and vague in terms of transparency," he said.
Kan said he is considering setting up a new team under the direction of Prime Minister Yukio Hatoyama that would aim to revive the forestry industry. That would also help create jobs, he said.
About 70 percent of Japan's landmass is forested, but the country produces only 20 percent of its demand for forest products, Kan said.
"I would like to improve this situation radically," he said.