TOKYO - Japan's tax revenue for fiscal 2025 ended March is expected to set a record high for the sixth straight year, exceeding 84 trillion yen ($517 billion), a source close to the matter said Thursday.
The expected total is up about 9 trillion yen from 75.23 trillion yen in fiscal 2024, as strong corporate earnings lifted corporate tax revenue while inflation and wage growth supported consumption and income tax revenues.
The increase would be the largest on record, surpassing the previous record rise of about 7 trillion yen in fiscal 2014, when the consumption tax rate was raised to 8 percent from 5 percent.
It would also eclipse the government's most recent estimate of 80.7 trillion yen. The Finance Ministry is expected to announce the result possibly Friday.
Consumption tax revenue rose 1 trillion yen from the previous year to 26 trillion yen, supported by inflation and firm household spending.
Income tax receipts increased 4 trillion yen to 25.3 trillion yen, rebounding after falling in fiscal 2024 due to a temporary tax cut introduced under the administration of then Prime Minister Fumio Kishida.
Corporate tax revenue climbed 3.8 trillion yen to 21.7 trillion yen.
The expected record comes as the government is considering cutting the consumption tax rate on food and beverages to 1 percent from 8 percent in April 2027.
The higher-than-expected revenue would not be immediately available to compensate for consumption tax cuts in the financing of pensions, medical and nursing care, and support for child-rearing. Any resulting budget surplus would instead be used for government debt repayment, funding the defense buildup and other purposes, the source said.
The government currently projects tax revenue of 83.74 trillion yen for fiscal 2026, but the estimate could be revised upward following the stronger-than-expected result for fiscal 2025, according to the source.
