Japan Local Tax Revenue Tops 50 T. Yen for 1st Time

Tokyo, July 10 (Jiji Press)–Japan’s local tax revenue in fiscal 2025 is estimated to have exceeded 50 trillion yen for the first time, reflecting higher individual resident tax revenue on the back of wage hikes, government data showed Friday. In the year that ended in March, the total tax revenue, including special corporate enterprise transfer tax, increased 5.2 pct from the previous year to 50,014.1 billion yen, hitting a record high for the fifth consecutive year, according to the internal affairs ministry’s preliminary estimates. The total exceeded the central government’s projection in its fiscal 2025 local finance plan by 2 trillion yen. Individual resident tax revenue rose 12.9 pct to 15,522.5 billion yen, partly reflecting the end of a fixed-amount tax cut introduced in fiscal 2024 under the administration of then Prime Minister Fumio Kishida. Amid robust performances on the stock market, revenues from dividend income taxes and taxes on capital gains from share transfers also increased. Corporate tax revenue, or combined revenue from corporate enterprise tax and corporate inhabitant tax, expanded 3.2 pct to 10,607.7 billion yen, driven by strong corporate earnings. Fixed asset tax revenue climbed 2.5 pct to 10,206.6 billion yen, surpassing 10 trillion yen for the first time, thanks to brisk demand for new housing construction and building extensions. Local consumption tax revenue went up 0.8 pct to 6,967.5 billion yen, reflecting an increase in consumer spending amid inflation. “Looking ahead, local tax revenues could be affected by developments such as the tariff policy of U.S. President Donald Trump’s administration and the Middle East situation. Whether the trend of increasing revenue will continue depends on the sustainability of robust wage increases,” a ministry official said. In its fiscal 2026 local finance plan, the ministry projects local tax revenue to total 50,420.2 billion yen. END [Copyright The Jiji Press, Ltd.]