Amadeusz Juskowiak

Japan sales tax may force nakasone out of office

Prime Minister Yasuhiro Nakasone is likely to leave office this summer amid opposition to his controversial taxreform package political analysts said

They said Nakasones reputation as a skilled politician has suffered irreparable damage from his support of a five pct sales tax planned for January 1988

Nakasone is trying to carry out a drastic tax reform at the end of his administration which is not only impossible but also is very irresponsible as a politican Rei Shiratori professor of politics at Dokkyo University told Reuters

Nakasone will almost certainly step down as soon as parliament approves the sales tax probably in the summer Shiratori said

Some ruling Liberal Democratic Party LDP members of parliament have spoken against the tax which Nakasone says is needed to balance planned cuts in income and corporate taxes

Nakasone today called for disciplinary action against LDP members who oppose the tax There are some who are objecting because of their constituencies he told a meeting of government and party leaders If the party discipline is broken I would like to see punishment considered

A proposed sales tax has become a political issue partly because Nakasone breached his election pledge against introducing it Shiratori said

Moreover the tax is being introduced when the public feels uncertainty about the sluggish economy stemming from the yens appreciation and about the future when the Japanese society is rapidly aging he said

Political analysts said the controversial tax could affect the more than 2500 local elections scheduled for April involving governors mayors town and village heads and assemblies at all levels

But the situation is complicated since opposition parties excluding the communists sometimes put up joint candidates with the LDP the political analysts added

Shiratori said In the worst case implementation of the sales tax now scheduled for next January may be put off for some time before the government makes a final decision

Another alternative is to modify the planned five pct to perhaps three pct

A third alternative for the government is to ram through the bills only with the attendance of LDP MPs he said

Seizaburo Sato professor of politics at Tokyo University thought the last possibility most likely I think the LDP alone will take a vote on the tax bills he said

The LDP now holds 304 seats in the 512seat Lower House and 143 in the 252seat Upper House

To lure opposition parties back to parliament after the LDP pushes through the tax bills the Nakasone cabinet will have to resign Sato said

Boycotting opposition members will be more willing to return to parliament if a new cabinet has been formed he said

REUTER