Japan's Targets Budget Borrowing to Drop to 43%

Hiruki Nakamura
23 Dec, 2013
New York City

Government in Japan planned for higher tax revenues from rising corporate taxes and higher sales tax and revenues bonds to pay for 43% of total spending, lower than 46.3% in the current fiscal year that ends in March.

[R]3:00 PM Tokyo – Government in Japan planned for higher tax revenues from rising corporate taxes and higher sales tax and revenues bonds to pay for 43% of total spending, lower than 46.3% in the current fiscal year that ends in March.[/R]

Government of Japan and the ruling coalition in Japan adopted fiscal budget that anticipated higher tax revenues and lower primary budget deficit.

The government based its budget on nominal economic growth in the next fiscal year at 3.3% and real gross domestic product growth at 1.4%.

Government estimated 95.88 trillion yen or $921 billion budget in the next fiscal year starting from April 1, Finance Minister Taro Aso said at a meeting in Tokyo yesterday.

Japan plans to issue 41.25 trillion yen of new revenue bonds in the next fiscal year and the revenues from the bond sale will pay for 43% of next year’s budget, lower than 46.3% in the current fiscal year.

The primary budget deficit, calculated after subtracting expenditures and not counting interest payments from general revenues excluding bond sales, will improve by 43 trillion yen.

Finance ministry estimated 23.2 trillion yen in deficit in the current fiscal year.

Tax revenues in the next fiscal year is estimated to increase to 50 trillion yen from 43 trillion yen and social security spending will increase to 30.5 trillion yen from 29.1 trillion yen in the current year.

Defense spending is estimated to increase by 130 billion yen to 4.88 trillion yen and public works spending is estimated to grow 680 billion yen to 5.96 trillion yen.

The government calculation also considered higher sales tax and higher corporate tax revenues in the next fiscal year.

The sales tax is expected to increase 8% from the current 5% rate from April 1 and the tax is expected to increase to 10% in fiscal 2015.