Tax revenue hit a record ¥60.36 trillion in fiscal 2018 on the back of higher wages and dividend payments, the Finance Ministry said Tuesday.
Tax revenue in the year through March increased 2.7 percent from a year earlier, surpassing a government estimate of ¥59.93 trillion, according to the ministry.
The previous highest amount of tax revenue collected came in fiscal 1990, at the end of the country’s asset-inflated economic bubble, when revenue of ¥60.11 trillion was recorded.
Following the global financial crisis in 2008, revenue plunged to ¥38.73 trillion in fiscal 2009, its lowest level in the post-bubble period.
In fiscal 2019, the government expects tax revenue of ¥62.50 trillion as a result of a planned increase to consumption tax in October, which will see the rate rise to 10 percent from the current 8 percent.
But it is uncertain whether corporate earnings, an important component of overall tax revenue, will continue to grow amid escalating U.S.-China trade tensions.
Among the sources of the government’s income in the reporting year, income tax revenue rose 2.7 percent to ¥19.90 trillion, underpinned by increased wages on the back of upbeat corporate performances.
Corporate tax revenue rose 1.8 percent to ¥12.32 trillion, while consumption tax revenue declined 2.2 percent to ¥17.68 trillion, according to the ministry.