Nakasone Said Willing to Revise Sales tax Plan

Japanese press reports said Prime Minister Yasuhiro Nakasone has said he may compromise on his controversial sales tax plan, bowing to widespread opposition even within his own party.

The reports said he told a meeting of supporters of his ruling Liberal Democratic Party today the proposed five pct tax should be amended if there was anything wrong with it.

Officials were not immediately available for comment.

Until now, Nakasone had vowed to press on with the tax as part of his plan to reform Japan’s 36-year-old tax system.

But most Japanese newspapers and news agencies quoted him as saying today he would not foist the tax on the Japanese people if they hated it.

Opposition parties and some industry groups say the tax breaks Nakasone general election campaign promises last July and would discourage consumer spending, needed to meet government pledges to try to stimulate economic growth.

Pressure for the tax to be amended or shelved is likely to increase soon, before a first round of local elections due on April 12, political analysts said. Resistance has spread from opposition parties and affected industries to the LDP.

Some 36 of Japan’s 47 provincial governments have called for the plan to be scrapped or handled carefully, government officials said.

Some leading LDP candidates for the local polls have not asked Nakasone to make a campaign speech for them as they fear his presence would weaken their position in the elections.