Tax

February 2004

Government tax revenues in December fell 1% from a year earlier to Y2.2 trillion due to a slight drop in income tax revenues, according to the Ministry of Finance. Cumulative tax revenues from the start of fiscal 2003 in April through December came to Y23 trillion, down 1.7% from the same period a year earlier. The total for the April-December period was 57.4% of the Y41.78 trillion in revenues projected for the full fiscal year, up from an average 56% in the past five years. Overall tax revenue collection is proceeding roughly at the projected pace. Revenues from income tax fell 3% from a year earlier to Y948.55 billion after tax withheld from wages fell 3.2% to Y900.56 billion. Corporate tax revenues rose 1.1% to Y213.57 billion, reflecting a boost in profits for major manufacturers. However, that tax cuts for corporate research and development likely would push down corporate tax revenues from February, and the outlook for the entire fiscal year was till uncertain. Revenues from the liquor tax rose 3.6% to Y139.32 billion, after brisk sales of shochu more than made up for a drop in the sales of beer. Revenues from the consumption tax rose 0.5% to Y264.39 billion, according to the Ministry. (February 3, Kyodo News, the Daily Yomiuri)