Tokyo Gov. Yuriko Koike raps state move to bolster system that diverts Tokyo’s tax revenues to other municipalities

JIJI

The central government’s plan to beef up a tax allocation system that diverts the capital’s revenue to local governments with lower revenue has drawn fire from Tokyo Gov. Yuriko Koike, who marked two years in office on Aug. 2

“The biggest point of the argument is not about (local governments) competing within the whole pie (Japan), but on how to enlarge the pie,” Koike said in an interview earlier this month. She also questioned the progress made by the regional revitalization program drafted by the Abe administration.

Given Japan’s tight fiscal situation, steps to “bolster” the allocation system, which taps over ¥1.8 trillion in corporate tax revenue collected by the Tokyo Metropolitan Government, is expected to become one of the pillars of the fiscal 2019 tax reform package. The move is part of the central government’s efforts to reduce revenue gaps among municipalities and other local governments.

Koike said that while many criticize the “unevenly distributed” tax revenues, the current system of allocating state tax revenue to local governments is fulfilling the role of correcting disparities just fine.

“I have no choice but to question Japan’s sustainability if the pie (of tax revenues) is simply moved from here to there,” she said, disputing the central government’s measures to correct the excessive concentration of people and industry in Tokyo.

Koike also stressed that the metro government needs more steps to cope with fierce summer heat before the 2020 Olympics, during which her term will end on July 30.

Koike, who created drama by postponing the moving plan for Tsukiji, the famous but aging fish market in Tokyo’s Chuo Ward, when she took office, declared the market’s new pollution-tainted site in Toyosu in neighboring Koto Ward safe on July 31.

“We need to prepare an environment that will allow work to continue without interruption immediately after the (Toyosu) market opens in October,” the governor said.

Koike also touched on the death of a girl killed by the Osaka earthquake in June. The 9-year-old was crushed by a concrete block wall at her elementary school in Takatsuki.

“If (municipalities) replace block walls with wooden walls, using wood from all over Japan, it will lead to forest conservation and flood control,” she said.

Koike revealed that she plans to share her suggestion with other regions as well.