Tax revenues could reach 49 trillion yen in fiscal 2005, about 2 trillion yen more than previously forecast, thanks to the continuing economic recovery, Finance Ministry sources said Thursday.
If revenues top 49 trillion yen, it would be the government’s highest tax haul in five years, surpassing the initial budget estimate of 44 trillion yen and a revised forecast of 47 trillion yen in February.
The expected increase in full-year tax revenue stems from 1 trillion yen growth in income tax revenue and revenues gained from customs, reflecting in part an increase in stock dividend capital gains incomes on rises in Japanese share prices in the reporting year, Finance Ministry officials said.
A several-hundred billion yen increase in corporate tax revenues also contributed to expanded overall tax revenues.
The higher-than-expected tax revenue is good news for ruling coalition lawmakers and government officials involved in drawing up a blueprint by early July to address the nation’s debt-ridden finances through both spending cuts and tax increases.
Ministry officials also said they expect tax revenues in the current fiscal year forward will also be better than their projections, thanks to natural increases stemming from the economic recovery. Official tax receipts for fiscal 2005 will be finalized when the data for May are released next month.
Although the fiscal year ended on March 31, corporate taxes from firms that closed their books at the end of March are included in the May data.
About 40 percent of the year’s corporate tax and 20 percent of the consumption tax are received in May.
The ministry also said that tax revenues grew 14.7 percent in April from a year earlier to 4.63 trillion yen.
This brought total tax revenues for fiscal 2005 so far to roughly 41 trillion yen, up 6.8 percent from the same period the previous year.
The cumulative revenues at this point were 87.2 percent of the 47.042 trillion yen projected for the full fiscal year.
Consumption tax revenue rose 27.7 percent to 1.2 trillion yen and corporate tax revenue climbed 22.8 percent to 546.35 billion yen. Income tax revenue expanded 10.2 percent to 2.34 trillion yen. Liquor tax revenue was up 2.2 percent to 101.28 billion yen. Tobacco tax revenue fell 5 percent to 70.08 billion yen.
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