Japan's annual tax revenue likely hit a record high for the third straight year in fiscal 2022 and may have reached the ¥70 trillion ($500 billion) mark for the first time, government data showed Thursday.
The rising trend reflects an increase in consumption tax revenue amid the rising prices of goods and companies paying more taxes on their income as the negative impact of the COVID-19 pandemic continues to wane.
Tax revenue finalized by the end of April for fiscal 2022, which ended in March, rose 8.1% from a year ago to ¥61.53 trillion, the largest-ever for the period, the Finance Ministry said.
While the fiscal year has already ended, the total tax revenue figure has yet to be finalized because many of the firms that closed their books at the end of March have to still pay all their taxes.
Japanese manufacturers have seen their earnings recover after they took a hit from the COVID-19 pandemic, which depressed economic activity and disrupted supply chains.
The yen's precipitous drop last year, especially against the U.S. dollar, also proved a tailwind for exporters because their overseas earnings were inflated when brought back home.
The service sector had lagged behind manufacturers in its recovery but the lifting of anti-virus curbs and a revival of inbound tourism, albeit at a gradual pace, boosted demand.