CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Japanese Tax Collections Fall For First Time Since 2009

Japanese Tax Collections Fall For First Time Since 2009

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

14 July 2017


Japan's Ministry of Finance announced last Wednesday that tax revenues had declined year-on-year for the first time since the 2009 fiscal year, potentially throwing a spanner in the works of Prime Minister Shinzo Abe's drive to re-invigorate the economy via targeted spending and stimulus packages, popularly known as "Abenomics."

The approximate JPY2 trillion shortfall for fiscal year 2016 compared to estimates, representing a JPY800bn drop on the previous fiscal year, comes as a result of declines in tax collection across the board, including corporate tax, income tax, and consumption taxes.

The Japanese authorities have been repeatedly urged to increase he consumption tax rate in order to boost revenues, most recently by the International Monetary Fund. In a report published in June of this year, the IMF suggested that Japan should commit to new gradual increases to its consumption tax rate, beyond 10 percent.

It said the Government should "place emphasis on a gradual, pre-announced schedule of consumption tax rate hikes, of 0.5 to 1.0 percentage points in regular intervals, starting as soon as possible, and continuing until the rate reaches at least 15 percent."

Japan's present eight percent consumption tax rate was scheduled to increase to 10 percent in April 2017, after an earlier delay that put forward the date from October 2015. It will now not be in place until October 1, 2019, at the earliest, with no future hikes scheduled as yet.

The OECD went further in April, suggesting that the country should hike value-added tax and taxes on income, capital gains, and inheritances, in order to offset the revenue lost from corporate tax cuts.

The corporate income tax rate was reduced to 29.97 percent from 32.11 percent in 2016, and there are plans to reduce the levy to 29.74 percent in 2018.

TAGS: tax | value added tax (VAT) | sales tax | Organisation for Economic Co-operation and Development (OECD) | corporation tax | Japan

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »