In a recent report, a state panel urged the central government to transfer more tax-collection power to local governments and help them secure their own tax revenues. I have no objections to the proposal, made by the Decentralization Promotion Committee in its final report to Prime Minister Junichiro Koizumi. I am doubtful, however, about how to enforce the proposal, which was merely an opinion expressed by the panel. It was not an official recommendation based on Article 10 of the Decentralization Promotion Law.
I believe that local governments must be ready to bear basic responsibility for local administrative work without depending on "favors" of power and tax revenues granted by the central government.
Of overall expenditures by the central government and local autonomies, the latter account for two-thirds. Of overall revenue, however, local governments account for one-third, making up for the rest with central government tax allocations and state subsidies. A predominant view regarding tax allocations has been that they are revenue sources transferred from the central government to local authorities to achieve a better balance in local finances.