Japan to Defer Tax Hikes for Defense Spending Until FY 2027
Tokyo, Dec. 6 (Jiji Press)--The Japanese government plans to defer at least until fiscal 2027 the full-fledged implementation of any tax hikes to cover defense spending, in light of economic uncertainties stemming from rising prices, informed sources said Tuesday.
Also behind the plan is strong opposition from members of the ruling Liberal Democratic Party to corporate and other tax hikes.
Prime Minister Fumio Kishida has instructed Finance Minister Shunichi Suzuki to earmark some 43 trillion yen for defense spending over the five years through fiscal 2027. The amount is more than 1.5 times the 27.47 trillion yen set under the current medium-term defense capability development program.
Suzuki told a press conference on Tuesday that the government will secure financial resources for defense spending until fiscal 2027 by making efforts on both the expenditure and revenue sides, such as expenditure reform, the issuance of government bonds and the use of surpluses at the government's special accounts and nontax revenues.
Regarding the financing of defense spending from fiscal 2027, Suzuki stressed the need to secure "stable" financial resources, apparently having in mind raising core taxes, such as corporate and income taxes, which generate large revenues.
[Copyright The Jiji Press, Ltd.]