Japan Tax Revenue Seen Reaching Record 83.7 T. Yen in FY 2026

Tokyo, Dec. 26 (Jiji Press)–The Japanese government’s general-account tax revenue in fiscal 2026, which starts next April, is projected to reach a record high of 83,735 billion yen, up 7.6 pct from the level under the fiscal 2025 initial budget, according to the draft state budget for the upcoming year adopted Friday. Despite an expected decline in revenue due to a planned major hike in the minimum taxable income threshold, overall tax revenue would hit a record high for the seventh consecutive year thanks to inflation and strong corporate earnings. Income tax revenue is seen increasing 11.7 pct to 25,325 billion yen. Corporate tax revenue is projected to rise 7.5 pct to 20,696 billion yen, and consumption tax revenue is forecasted to grow 7.1 pct to 26,688 billion yen, both record highs. Also on Friday, the government adopted a fiscal 2026 tax system reform package. The hike in the minimum taxable annual income level from the current 1.6 million yen to 1.78 million yen is estimated to lead to a tax revenue fall of 668 billion yen a year. Meanwhile, the government projects an annual revenue increase of 675 billion yen from an overhaul of a tax cut program aimed at encouraging companies to raise wages. The revisions will lead to a net revenue increase of 39 billion yen a year. The government also expects a revenue increase of 1,337 billion yen a year from hikes in the corporate, tobacco and income taxes to generate funds to enhance the country’s defense capabilities. END [Copyright The Jiji Press, Ltd.]