Japan to Finalize Plan to Address Tax Revenue Gap Next Year

Tokyo, Dec. 12 (Jiji Press)–The Japanese government and ruling parties are considering finalizing details of a plan to address tax revenue gaps between Tokyo and other local governments at the end of next year, people familiar with the matter said Thursday. Government and ruling coalition officials have been discussing ways to correct an imbalance in local tax revenues favoring Tokyo, which has led to increasing gaps in administrative services. Specifically, they are considering reallocating more revenue from corporate enterprise tax and land fixed-asset tax from the capital to other local governments. They plan to make a decision on the matter as part of annual tax system reform work for fiscal 2027. The plan will be spelled out in the ruling coalition’s fiscal 2026 tax reform package. The Tokyo metropolitan government’s financial resources for its own policies total 281,000 yen per resident, about 3.6 times higher than the average of 78,000 yen for other prefectures. Using its abundant financial resources, the metropolitan government has offered benefits to residents that other prefectures have not, including a monthly allowance of 5,000 yen per child. END [Copyright The Jiji Press, Ltd.]