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Japan Parties Approve Year‑End Repeal of Gasoline Surtax, Funding Gap Looms

The deal foresees roughly ¥1.5 trillion in annual revenue loss without specifying how the money will be replaced.

Overview

  • Six parties agreed to abolish the 25.1 yen per liter provisional levy on gasoline on December 31, ending a decadeslong surcharge.
  • Officials estimate the repeal of temporary rates on gasoline and light oil will cut annual tax revenues by about ¥1.5 trillion.
  • The agreement cites a review of corporate tax special provisions and higher burdens for very high earners but sets no target amounts.
  • An initial Liberal Democratic Party draft mentioning a review of auto-related taxes was dropped from the final six-party text.
  • Okinawa’s separate 7‑yen‑per‑liter discount is projected to shrink to 3.8 yen, and Governor Denny Tamaki plans to press the government in Tokyo next week to preserve the full cut.