Photo/Illutration The ruling Liberal Democratic Party and junior coalition partner Komeito will promise cash handouts in their campaigns for the July 20 Upper House election. (Asahi Shimbun file photo)

Japan’s tax revenue for fiscal 2024 will likely exceed 75 trillion yen ($522 billion) for the first time, sources said, but the expected surplus will fall short of covering a ruling party election pledge.

The National General Account tax revenue will mark a record high for the fifth consecutive year, the government sources said, attributing the increase to strong corporate earnings that led to wage hikes and higher income tax payments.

In November last year, tax revenue for fiscal 2024 was forecast to hit 73.4 trillion yen, meaning the actual total should provide a surplus of about 2 trillion yen.

Prime Minister Shigeru Ishiba has pledged to return the expected surplus to the public through benefits, such as 20,000-yen cash handouts to every resident in Japan.

This pledge is included in his Liberal Democratic Party’s campaign platform for the July 20 Upper House election.

However, fulfilling this cash-handout promise would require around 3.5 trillion yen in funding, more than the expected tax revenue surplus.

Ishiba said he will not issue deficit-covering government bonds for the cash handouts.

Japan’s tax revenue figure has been increasing since fiscal 2019, when the country collected 58.4 trillion yen in taxes.

The hike in the consumption tax rate to 10 percent and strong corporate earnings after the COVID-19 pandemic have fueled the expansion.

In fiscal 2022, tax revenue entered the 70 trillion-yen range. Revenue for fiscal 2025 is expected to reach 77.8 trillion yen.

The Finance Ministry will soon officially announce the annual tax revenue amount.

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