Japan corporate tax revenue set to top estimate by nearly $10B
TOKYO -- Japan's corporate tax revenue for the fiscal year that ended in March is likely to exceed the government's estimate by up to 1 trillion yen ($9.67 billion), as the economic recovery has fueled strong earnings growth at many companies.
According to a Nikkei survey, the total amount of taxes to be paid by listed companies that closed their books in March will likely jump about 50% from the previous fiscal year. For small and midsize companies, however, the combined total will likely rise only slightly because their earnings have not been as quick to improve as those of their larger counterparts.
Japan's overall corporate tax revenue is expected to reach up to 11.6 trillion yen, easily topping the government's current estimate of 10.065 trillion yen and marking the fourth straight year of growth. The final figure will be available in late June.
The survey covered 828 listed companies that disclosed unconsolidated income statements. Financial institutions and certain other companies were excluded. Total corporate taxes to be paid by parent companies for fiscal 2013, including the corporate inhabitant tax and the corporate enterprise tax, soared 51% to 2.45 trillion yen.
Automakers drove the sharp rise. Toyota Motor's tax payments, for example, jumped over sevenfold to 492.1 billion yen, as its pretax profit more than doubled.
Tax payouts by KDDI, whose profit was pushed up by its strong smartphone business, rose 16% to 179.2 billion yen.
For Central Japan Railway, better known as JR Tokai, the figure climbed 5% to 130.2 billion yen. Passenger volume for its shinkansen services hit a record high.
The revenue increase will provide more ammunition for proponents of cuts in effective corporate tax rates, which include both national and local levies.
The government is considering lowering effective corporate tax rates, which are high by international standards. Prime Minister Shinzo Abe said Friday the government will start reducing them from fiscal 2015. The cuts are expected to be included in a new basic economic and fiscal policy plan to be adopted by the government by the end of June.