Japanese Tax Revenues Likely To Fall Short Of Target

by Mary Swire, Tax-News.com, Hong Kong

16 October 2001

In another blow to Prime Minister Junichiro Koizumi's plans to rescue Japan's ailing economy, it was revealed that the country's tax revenues are likely to fall short of official estimates of 50.7 trillion yen.

A Ministry of Finance source confirmed that the shortfall was likely to be in the region of 1 trillion yen, and was mainly the result of dwindling corporate tax returns. Although this has been at least partly caused by the economic slowdown, corporate tax evasion in Japan is reported to be at an all time high, with companies secreting away around 67.2 billion yen by failing to report truthfully to the tax authorities.

The corporate sector in Japan is already under government scrutiny, with plans to abolish a whole host of business related tax incentives in order to finance support packages for the stricken banking industry.

The government is expected to meet later this week to begin deliberation on a supplementary budget based on these revised predictions.

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