• Kyodo

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The Finance Ministry is set to replace Administrative Vice Minister Eijiro Katsu with Yasushi Manago, director general of the Budget Bureau, later this month as it turns to compiling the fiscal 2013 budget now that the contentious tax hike bill has been enacted, sources said Saturday.

Katsu has extensive ties in both the ruling and opposition camps and worked under both Finance Minister Jun Azumi and his predecessor, current Prime Minister Yoshihiko Noda. He oversaw the drafting of the bill to raise the consumption tax and one for a temporary tax hike to finance reconstruction in the wake of the Great East Japan Earthquake.

He joined the ministry in 1975 and works principally in the Budget Bureau. He was promoted to administrative vice minister, the top post in the bureaucracy, from Budget Bureau director general in July 2010.

Manago took over from Katsu as chief of the Budget Bureau following his promotion to vice minister.

Drafting the state budget for fiscal 2013 poses several challenges, including the need to find ways to overcome severe funding shortages and to develop measures to help low-income earners who might be heavily affected by the sales tax increase.

Finance Minister Azumi appears to support these personnel changes. The sources said an appointment order might be issued if they are approved at a meeting of personnel officials at the prime minister’s office.

The order could be delayed until after the Sept. 8 end of the current Diet session, depending on how deliberations on special legislation to authorize the issuance of deficit-financing debt proceed, they added.

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