TOKYO (Kyodo) -- Japan's tax revenue for this fiscal year is expected to reach around 80.7 trillion yen ($517 billion), a new record for the sixth consecutive year, as recent wage hikes will help boost income tax revenue, a source close to the matter said Wednesday.
The projected amount is 2.9 trillion yen higher than the 77.82 trillion yen estimated in the initial budget for the year through March 2026, also driven by higher revenue from the consumption tax amid inflation, according to the source.
But the figure also reflects the planned end of the gasoline tax surcharge in December, a move intended to ease financial burdens on households.
As tax revenue was expected to grow this fiscal year, Prime Minister Sanae Takaichi, a proponent of expansionary fiscal spending, has said her government will take advantage of the expected higher revenue to cover part of an economic package.
Her government is expected to finalize a supplementary budget for the current fiscal year on Friday to help fund the 21.3 trillion yen economic package. She aims to address rising living costs and boost investment in key industry sectors to spur growth with the measures.
The prospect of the massive spending has caused a selloff in the yen and Japanese government bonds. Investors are concerned that Japan's fiscal health, already the worst among advanced economies, may deteriorate, with its debt more than double its gross domestic product.
In an apparent attempt to ease such concerns, Takaichi, who took office last month, has stressed the importance of "wise spending" under her slogan of "responsible and proactive public finances."