The Japanese government may cut its fiscal 2016 tax revenue estimate to around 55.7 trillion yen ($490 billion) from 57.6 trillion yen, reflecting sluggish corporate tax revenue, government sources said Tuesday.
That also could set the stage for the first year-on-year drop in tax revenue in seven years, or since fiscal 2009 during the worst of the global financial meltdown triggered by the collapse of the U.S. housing market. Central government tax revenue totaled 56.29 trillion yen in fiscal 2015 on a general account basis.
In an extra budget to be compiled later this month for fiscal 2016 through March, the government is considering issuing deficit-covering bonds to make up for the shortfall, the sources said.
In the April-October period, tax revenue stood at 19.48 trillion yen, with the yen’s strength since the beginning of 2016 weighing on corporate tax revenue, according to the Finance Ministry.
The administration of Prime Minister Shinzo Abe has touted increased tax revenue as one of the successes of his “Abenomics” economic and fiscal policy mix that includes bold monetary easing by the Bank of Japan.