Japanese Responses to Questions on French

UNCLAS SECTION 01 OF 02 TOKYO 002328

SIPDIS

SIPDIS

TREASURY FOR INTERNATIONAL AFFAIRS

E.O. 12958: N/A
TAGS: EAID EFIN EAIR AFIN APECO JA
SUBJECT: Japanese Responses to Questions on French
"Solidarity Tax" Proposal

REF: State 60006


1. The Japanese Ministry of Finance provided the
following responses to the questions sent reftel:

Question: Does Japan levy airline ticket taxes which
are used for general development assistance, or any
other non-aviation related purpose, within the country?

Answer: No.

Question: If so, are the taxes used for tourism
development?

Answer: Not applicable

Question: Is Japan considering levying such a tax in
the future?

Answer: No.

Question: If Japan is considering such a tax, would it
also consider allocating the funds collected to
official development assistance outside the country?

Answer: Not applicable.

Question: Would Japan turn the funds collected over to
an international organization for distribution as ODA
or would it keep control of the funds within the
country?

Answer: Not applicable.

Question: Is there precedence for tax streams from one
specific sector being used to fund development or other
projects? If so, please provide examples.

Answer: There is no precedence for tax streams for one
specific sector being used to fund development.
However, certain excise taxes are earmarked for a
corresponding Special Account that is used to fund
certain categories of projects:

-- Gasoline Tax revenues are earmarked for road
construction and improvements.

-- Aviation Fuel Tax revenues are used for
expenditures related to airports and airport
construction by the national and local governments.

-- Petroleum and Coal Tax revenues are used for
"various programs to secure a stable supply of
petroleum and to develop and introduce alternative
energy sources."

-- Local Road Tax revenues are used for local road
improvements.

-- One-third of Motor Vehicle Tonnage Tax revenues are
earmarked for local road improvements.

-- Revenue from the "Promotion of Power Resources
Development Tax" is used to promote the establishment
and safety of atomic, hydroelectric, and geothermal
power plants.

For more details, please see Chapter 12 through 18 of
"AN OUTLINE OF JAPANESE TAX 2005" from the following
URL:

http://www.mof.go.jp/english/tax/taxes2005e.h tm

Question: Does Japan use tourism taxes to fund general
revenues?

Answer: No

Question: Would support for this airline ticket tax
and eventual implementation be likely to result in
Japan increasing ODA to other countries, or keeping ODA
levels the same by reducing ODA from other government
revenue sources to offset the airline ticket tax?

Answer: The Government of Japan does not know this at
present.


2. The Ministry of Finance also requested USG
responses to the questions raised in reftel. The

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Finance Ministry officials who responded to Post's
inquiry indicated that, in their view, these questions
go beyond a country's position on the "solidarity tax"
proposal and address broader tax practices.


3. Post would appreciate any further information or
guidance the Department can provide.

DONOVAN