Japan's tax revenue for fiscal 2023 reached a record 72.08 trillion yen ($445 billion), the Finance Ministry said Wednesday, setting a new high for the fourth consecutive year, boosted by strong corporate earnings.
The revenue for the year ended in March, up around 2.5 trillion yen from the government's initial estimate, compares to the previous fiscal year's 71.14 trillion yen.
Revenue from the international tourist tax more than tripled to 39.9 billion yen, driven by a revival of inbound tourism following the removal of COVID-related restrictions and a weaker yen. Japan charges 1,000 yen per person departing the country, regardless of nationality.
The increase in full-year tax income, however, did not change the fact that Japan was heavily reliant on debt issuance to satisfy its spending needs.
Revenue from corporate tax rose 6.2 percent over the year to 15.86 trillion yen, as the yen's decline to decades-low levels helped boost the earnings of Japanese exporters.
While the corporate sector has shown strength, domestic demand in Japan remains weak. Japanese firms have decided to use some of their profits to raise worker pay, but these increases have yet to outpace inflation.
Income tax revenue dropped 2.1 percent to 22.05 trillion yen, while consumption tax revenue was more or less flat, up 0.1 percent, to 23.09 trillion yen.
Higher inflation, a reflection of surging import costs of energy and raw materials magnified by the falling yen, has weighed on consumption.
For fiscal 2024, the government put its tax revenue estimate at around 70 trillion yen, boosting the likelihood that the final number may beat projections if corporate earnings remain robust.
