Downward revisions in corporate pretax profits may lead the Finance Ministry once again to lower its projected tax revenues, according to the results of a ministry survey released Wednesday.
"The downward trend has been accelerating since the summer. It's a severe figure," a ministry official said in reference to the November data. The survey shows pretax profits in all industries plunging 18.8 percent in the year to March 31 as compared with fiscal 2000.
The subsequent decline in corporate taxes will likely make the government's target of 49.6 trillion yen in revenues unattainable for the current fiscal year.
In the previous quarterly survey, conducted in August, companies projected pretax profits in the current fiscal year would shrink 3.9 percent.
But the bearish economic outlook in the U.S. after the Sept. 11 terrorist attacks in New York and Washington forced the companies in the latest survey to sharply revise their pretax profit projections.
Manufacturers said their pretax profits for the full year would drop 39.6 percent, compared with the 17.3 percent drop predicted in the previous poll.
Nonmanufacturers foresee a dip of 3.3 percent, reversing the 5.9 percent gain forecast in the previous poll.
On an all-industry basis, companies projected pretax profits in the second fiscal half would plunge 18.3 percent, compared with a 3.8 percent rise in the August poll.
In October, the ministry lowered its tax revenue projection for fiscal 2001 by 1.10 trillion yen to 49.63 trillion yen, partly due to dwindling corporate tax receipts.
Of the 1.1 trillion yen shortfall, 646 billion yen stems from a slide in in corporate tax revenues.