TOKYO — Japan’s national tax revenue in the fiscal year ended March is expected to fall below 60 trillion yen ($560 billion) for the first time in two years as a result of the economic slowdown brought on by the novel coronavirus outbreak, Nikkei learned Wednesday.
The latest cut in the forecast follows an earlier downward revision in December to 60.18 trillion yen, driven by U.S.-China trade tensions. That, in turn, was down from the original tax revenue estimate of 62.49 trillion yen.
The final estimate for fiscal 2019 may decline still further — perhaps as low as 50 trillion to 55 trillion yen — partly because of one-year tax deferments granted to companies hit by the pandemic. The tax breaks are granted to companies whose revenues declined by more than 20%, year on year, for more than one month since February, and apply to most taxes due by the end of January 2021, including consumption taxes, individual income taxes and corporate taxes.
The fall in revenue is likely to prompt the government to issue additional bonds. But it faces the difficult challenge of balancing the need for short-term stimulus and the country’s long-term fiscal health.
The government is also wary of a further slide in tax revenue for this fiscal year from the current estimate of about 63.51 trillion yen. Some private think tanks predict the tax take may fall below 55 trillion yen.
Japan’s tax revenue reached a record 60.35 trillion yen in the fiscal year ended March 2019.