Gov’t may sell NTT, JT shares to help fund disaster recovery


Japanese Diet Building

TOKYO (majirox news) — The government may sell off some of its shares in Nippon Telephone and Telegraph Corp. (NTT) and Japan Tobacco Inc. (JT) to help fund recovery from the March 11 disasters, government officials said July 28.

The government holds 36.2% of NTT’s shares and 50.01% of JT and would need to revise laws requiring it hold a minimum ratio of ownership of both companies before it could sell the shares and use funds to pay for a recovery it estimates will cost 19 trillion yen ($244.45 billion) over the coming five years.

The government has proposed funding the recovery by cutting costs, increasing non-tax revenues and taxes. However, many within the ruling Democratic Party of Japan (DPJ) strongly oppose a large-scale tax increase, prompting government officials to suggest that selling off the maximum possible extent of government-held assets could secure about 3.6 trillion yen ($46.27 billion).

Selling off the NTT and JT shares would allow the government to limit the increase in taxes it imposes to pay for rebuilding much of the Tohoku region devastated by the March 11 earthquake and tsunami that have claimed more than 20,000 lives and subsequent Fukushima Daiichi nuclear crisis, the world’s worst nuclear disaster in 25 years.

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One Response to Gov’t may sell NTT, JT shares to help fund disaster recovery

  1. Hugh Ashton on 09/09/2011 at 9:52 am

    The problem with these reports is that they never identify “the government officials” in question. Was this this a serious position taken by senior managers in the MOF, or was it an idea tossed around at a nijikai of junior DPJ representatives? Not saying it’s a bad idea – disposing of the government shares in JT would allow for a somewhat better tobacco taxation policy, almost certainly leading to lower healthcare costs.

    But to lead with “the government may”, based on a vague suggestion by unnamed officials, seems to be a rather premature judgement.

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