Tax revenue collected by the central government in fiscal 2015 totaled around ¥56.28 trillion, government sources said, falling short of estimates as corporate tax revenue was reduced by the effects of a firming yen.
For the past year to March 31, corporate tax revenue totaled about ¥10.82 trillion, marking the first drop in six years, evidence that improving corporate earnings and tax revenues claimed by the government as achievements of its economic policy have come to a halt, the sources said Tuesday.
It was the first time since fiscal 2008 that tax revenue failed to reach the amount projected by the government, which had forecast ¥56.42 trillion.
Still, total tax revenue increased by about ¥2.3 trillion from the previous year to hit the highest amount in 24 years, due to increased revenue from personal income tax on the back of higher wages and stock dividend income, the sources said.
But corporate tax revenue declined by about ¥200 billion from the previous year and was some ¥900 billion lower than the government projection, as corporate earnings were hit by a slowdown in overseas economies. The tax paid by the Bank of Japan also dropped due to worsening profits amid the yen’s appreciation.
The Finance Ministry will announce the actual financial results for fiscal 2015 on Friday.
Despite the smaller than expected tax revenue, the government spent about ¥1.4 trillion less than projected due to smaller debt interest payments, leaving a budget surplus of about ¥250 billion.
In fiscal 2015, the government also issued ¥1.5 trillion less in government bonds than planned, showing it is pursuing fiscal consolidation despite ballooning social security costs to care for Japan’s expanding elderly population.
The government could face the need to issue additional bonds to fund a supplementary budget for the current fiscal year, with some members of the ruling parties calling for another ¥5 trillion to ¥10 trillion in government spending to support the economy.
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