The government and the ruling coalition will seek to create a ''hometown tax'' as a way of narrowing disparities in tax revenues between metropolitan and regional areas, lawmakers and government officials familiar with the matter said yesterday. According to the Japanese news agency KYODO, the government will declare the creation of the new tax system in its annual economic and fiscal policy platform to be endorsed at a Cabinet meeting in June. The coalition will then put up the plan as a key campaign pledge for July's elections for the upper house of the Diet and seek to realize it as part of year-end tax system reforms for 2008, they said. The hometown tax was proposed by Internal Affairs and Communications Minister Yoshihide Suga who envisages the government letting taxpayers choose to allocate a certain amount of residential tax payments to their hometown. Prime Minister Shinzo Abe, Hidenao Nakagawa, secretary general of Abe's Liberal Democratic Party, and other leaders agreed to support the proposal because widening gaps in such areas as personal income and local tax revenues are expected to be a key campaign issue in the upcoming upper-house election. -- SPA
