The ruling Liberal Democratic Party and its coalition partner, Komeito, have decided not to include the introduction of a carbon tax in their tax reform package for fiscal 2022, informed sources said Thursday.
A carbon tax will instead be mentioned as an important issue that needs to be considered, along with various other policies aimed at realizing a carbon-neutral society.
The government and ruling bloc are expected to make full-scale arrangements on the issues toward fiscal 2023 or later. But the plan may face obstacles due to persistent opposition from business circles reluctant to bear greater burdens.
A carbon tax is a specific measure of a carbon-pricing system, which sets a price on greenhouse gas emissions as a countermeasure against global warming.
In the summer, the Environment Ministry called for the measure in its request for the fiscal 2022 tax system reform.
The draft reform package, compiled Thursday, said that the ruling parties will proceed with specialized and technical discussions on a policy mix, including a carbon-pricing system.
Business circles oppose shouldering greater burdens linked to greenhouse gas emissions due chiefly to the economic weakness amid the pandemic and recent surges in energy prices.
“Discussions can’t be launched on a specific system until the coronavirus and energy price issues have calmed down,” one of the sources said.
The European Union and China have already introduced an emissions trading system under which participating companies can purchase emission quotas from companies that have cut more emissions than required.
The administration of U.S. President Joe Biden is considering introducing a carbon tax.
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