(2) The \4,646 billion decrease in tax revenue caused by factors other than the special tax cuts, will be supplemented by the following measures.
(a) Repayment on the principal of the loans from the special account for local allocation tax, \646 billion, will be deferred, and local allocation tax will be increased by \2,110 billion. \300 billion of this addition will be provided from the national general account (\219 billion provided by Clause 3, Article 4-2 of supplementary provisions of the Local Allocation Tax Law, \61 billion from the interest of national loans, \20 billion from special measures related to tobacco tax), and \1,810 billion will be provided from loans from the special account for local allocation tax.
National government will repay \755 billion of the loan from the special account for local allocation tax. The interest on this loan and the loans for FY 96 and 97 will be provided by transferred funds from the general account in the year in which the interest is generated. These measures will be written in law.
(b) Construction loans will be increased by \1,890 billion.
(3) In order to finance the above measures, the amount of local allocation tax in FY '98 will need to be \17,519 billion, an increase of \2.3% over the previous year.
In accordance with Clause 2, Article 4-2 of the supplementary provisions of the Local Allocation Tax Law, the amount which was to be transferred from the general account to the special account for local allocation tax between FY '98 and FY 2000 will be transferred after FY 2001 and the following years, along with postponement of repayment of the national loan.
In addition, the following amounts will be added to the total amount of local allocation tax from FY 2003, as determined by the law.
・The amount to be added in FY '98, according to Clause 3, Article 4-2 of the supplementary provisions of the Local Allocation Tax Law, \480 billion, less \219 billion \261 billion
・The amount which was to be transferred from the general account to the special account for local allocation tax, as a supplement to the lowered rate of national grants for investment up to FY '92. \331 billion
・The amount which was to be transferred from the general account to the special account for local allocation tax, as a supplement to the revision of rates of nation grants for investment in FY '93. \107 billion
・The amount which was to be transferred from the general account to the special account for local allocation tax, as a supplement to the transitional deficit in local consumption tax revenue in FY '97 \10 billion
・The amount which was to be transferred from the general account to the special account for local allocation tax, as a supplement to the revision of the national health insurance system \64 billion
・The amount of interest which was to be transferred from the general account to the special account for local allocation tax, as a supplement to the loan from the special account for local allocation tax in FY '86,'92-'96 and '98(excluding the amount to be transferred in later years) \234 billion
