TOKYO, Nov 13: Japan’s Finance Minister Masajuro Shiokawa said on Wednesday he expects a shortfall in tax revenue in the year to March of around $23 billion.

Shiokawa told members of the ruling Liberal Democratic Party’s tax committee to expect a shortfall of between 2.7 and 2.8 trillion yen ($22.6 to $23.3 billion), panel members told AFP’s financial subsidiary AFX News.

“When I heard from Shiokawa about that number, I honestly was a little shocked because we had expected it would be about 2.0 trillion yen,” said Okiharu Yasuoka, a senior member of the committee who attended the meeting.

Ichizo Ohara, another committee member, said he was concerned over how the shortfall would be funded because Prime Minister Junichiro Koizumi has pledged to cap the issuance of new government bonds at 30 trillion yen.

“Shiokawa told us the revenue shortfall will be 2.7-2.8 trillion yen but he didn’t say anything about an increase in bond issuance to cover the shortfall,” said Ohara.

“I think the government is considering a two trillion yen tax cut on top of the existing revenue shortfall. How will the government cope with such spending?” he said.—AFP