Photo/Illutration The Finance Ministry building in Tokyo’s Chiyoda Ward (Asahi Shimbun file photo)

Total tax revenue for Japan’s fiscal 2022 general account reached a record high for the third consecutive year and topped 70 trillion yen ($484 billion) for the first time, the Finance Ministry said July 3.

The figure of 71.1373 trillion yen was up by about 4 trillion yen from the previous fiscal year.

Consumption tax revenue surged by more than 1 trillion yen to a record high 23.0792 trillion yen, and contributed the most to the overall tax figure for the third straight year.

Revenue from the consumption tax surpassed income tax revenue for the first time in fiscal 2020, after the sales tax rate was raised from 8 percent to 10 percent in October 2019.

Import-related consumption tax revenue jumped in fiscal 2022 due to a combination of soaring energy prices and the weak yen.

Income tax revenue rose to 22.5216 trillion yen in fiscal 2022 while corporate taxes totaled 14.9397 trillion yen, both up by more than 1 trillion yen from the previous year.

The increase in income tax revenue was attributed largely to wage hikes and higher dividends paid by large corporations to their shareholders.

The rise in corporate taxes reflected strong business performances, especially among large companies, the biggest payers of this tax.

The summary of estimated settlement of accounts for fiscal 2022 released by the ministry on the same day showed an account surplus of 2.6294 trillion yen.

In addition to higher-than-expected tax revenue, “unspent funds” that were budgeted but not used totaled 11.3084 trillion yen, the largest amount ever.

Although the issuance of new government bonds was reduced by 12 trillion yen, 4 trillion yen more than in the previous fiscal year, the surplus nearly doubled.

The average surplus for the past 10 years was 1.4 trillion yen.

Under the Fiscal Law, half of the surplus will go toward repaying government bonds. The government intends to use the other half to finance its increase in defense spending.

As the spendable amount of surplus used for defense spending is about 600 billion yen more than expected, calls for postponing a tax hike to cover rising defense costs will likely increase.

Expenditures for fiscal 2022 are expected to total 132 trillion yen. Even if tax revenues increase, the government will continue to rely on deficit-covering government bonds.

Related News