Japan enacts law deregulating use of road tax

The Japanese parliament has voted to amend a law that stipulates the allocation of specific tax revenue sources for road projects. The ruling coalition of the Japanese Liberal Democratic Party and the New Komeito party, as well as the top opposition Democratic Party of Japan voted for amendment, which scrapped a provision in the old law requiring the government to use the entire amount of gasoline and other automobile-related taxes for road infrastructure improvements only. It also abolished road construction grants for local governments, which accounted for 25% of the automobile-related tax revenues. To make up for the local governments’ revenue shortfalls for road projects caused by the lack of grants, the national government has established a new subsidy system. (April 22, 2009)