Rationalization of National Treasury Subsidies and Liabilities, and Strengthening of Local Tax Revenue Resources
From the point of view of enhancing the autonomy and independence of local authorities, with regard to the fiscal relationship between the national government and local authorities, a three-point review will be conducted on the rationalization of National Treasury subsidies and liabilities; reform of operation of and involvement in continuing National Treasury subsidies and liabilities; and the strengthening and stabilization of local general revenue resources, such as local taxes and the local allocation tax, bearing in mind the principle that the entity implementing the work shoulders the expense burden.
Rationalization of National Treasury Subsidies and Liabilities
1. Basic Thinking on the Rationalization of National Treasury Subsidies and Liabilities
・Funding will be classified into National Treasury liabilities, for which the national government defrays the expenses, and National Treasury subsidies, which the national government grants as an incentive or fiscal assistance measure; and rationalization will be carried out according to this classification.
National Treasury liabilities → To be reviewed in conjunction with the rationalization of national government involvement, etc., following a revision of role-sharing between national and local government.
National Treasury subsidies → Subsidies with a low subsidy rate, subsidies that have exceeded a certain period, etc. will be reviewed, and a National Treasury subsidy reduction plan will be formulated.
・For the time being, during the period of intensive fiscal structure reform (from fiscal 1998 to fiscal 2000),coordination with the cabinet decision on the promotion of fiscal structure reform (June 3,1997) will be maintained.
Subsidies involving the review of systems, etc. → Review of systems, policies, projects, etc.
Other subsidies, etc. → To be reduced by 10% or more compared with the initial budget for the previous fiscal year for each government ministry or agency. (from fiscal 1998 to fiscal 2000) <National Treasury subsidy reduction plan>
・Even when National Treasury subsidies and liabilities are abolished or reduced, if continued implementation of the work or project concerned is necessary, the necessary local general revenues will be secured through local taxes, the local allocation tax, etc.