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Tax revenue expected to decline for first time in seven years

  • WIKIMEDIA COMMONS

    The strong yen in the first half of fiscal 2016 slowed down growth in corporate tax revenue.

TOKYO >> Japan’s tax revenue in fiscal 2016 is expected to fall from the previous year, marking the first year-on-year decline in seven years, due mainly to slowing corporate tax revenue increases, according to sources.

The nation’s general-account tax revenue in fiscal 2016 is estimated to be at the 55 trillion yen (about $489 billion) level, down from 56.2 trillion yen in fiscal 2015.

The last time the tax revenue showed a year-on-year drop was in fiscal 2009 — the year after the global financial crisis triggered by the collapse of Lehman Brothers.

Growth in corporate tax revenue slowed due to the continuance of the strong yen in the first half of fiscal 2016, according to the Finance Ministry. Corporate tax revenue was 10.8 trillion yen in fiscal 2015.

The ministry will officially announce the fiscal 2016 general-account tax revenue in July.

After tax revenue dropped to about 38.7 trillion yen in fiscal 2009, it continued to increase for six consecutive years from fiscal 2010.

The government initially estimated tax revenue for fiscal 2016 at 57.6 trillion yen, but cut the forecast to 55.8 trillion yen in December.

However, the tax revenue for the year is seen falling even below the forecast revised downward by the government. Lower-than-estimated tax revenue is expected for the second consecutive year.

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