Koizumi to review tax spending plans

Koizumi: 'The government will show a clear direction'

TOKYO, Japan -- Japanese Prime Minister Junichiro Koizumi said on Monday his administration will review plans to spend special tax revenues on a wider range of projects before Upper House elections in July.

"The government will show a clear direction on the use of special revenues by the Upper House election after having more discussions with the (ruling Liberal Democratic) party," Koizumi told the Upper House budget committee.

The talks with the Liberal Democratic Party would pave the way for including the reforms in the national budget for the fiscal year starting next April.

Car industry tax revenue goes on roads

ALSO IN-DEPTH: Junichiro Koizumi

Automotive-related tax revenue - a vital component of special revenues - amount to about $47 billion (5.8 trillion yen) a year and is used for road construction.

Koizumi has pledged to cut fiscal spending and conduct reforms without fears of "sacred cows."

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Public works spending for roads is one such area and moves to cut it would be likely to face fierce resistance within the party, especially before a key poll.

The government needs to revise some laws in order to allow these fund to be used more widely.

Reuters contributed to this report.

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