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(Reuters) – TOKYO, June 30 (Reuters) – Despite the economic damage from the COVID-19 outbreak, Japan’s tax receipts are expected to have topped 60 trillion yen ($540 billion) in the fiscal year that ended in March, according to two official sources. Even though substantial COVID-19 spending handed out last year has added to the industrial world’s largest public debt burden, the bountiful tax revenue could soothe fears about the coronavirus’s impact on state coffers, possibly fueling calls for more fiscal stimulus. The figure was higher than the government’s initial projection of 55.1 trillion yen, owing to a surge in company earnings from strong U.S. and Chinese economic recoveries, according to officials who spoke on the condition of anonymity because they were not authorized to comment publicly. The other two major sources of tax collection, sales tax and income tax, also exceeded expectations, allowing total tax receipts to surpass the previous high of 60.4 trillion yen set in the fiscal year that ended in March 2019, according to the sources. “This was unexpected. Because of the pandemic, I expected tax income to drop “Takuya Hoshino, a senior economist at Dai-ichi Life Research Institute, echoed this sentiment. “This may motivate lawmakers to propose an additional budget of around 10 trillion yen before the election later this year,” he added, referring to the roughly 30 trillion yen of previous fiscal year’s stimulus program that went unused. find out more While a worldwide economic rebound helped raise corporate tax revenue in the second half of last fiscal year, private consumption, which accounts for more than half of the economy, may have been bolstered by stable employment and growing stock prices. According to them, raising the sales tax to 10% from 8% in October 2019 helped improve tax collection on a full-year basis in the previous fiscal year. Despite having a massive public debt that is more than twice the size of its $5 trillion economy, Japan has implemented three $3 trillion stimulus packages in the last year to combat the health and economic crises. The prospect of slowing growth in the world’s third largest economy, as well as an approaching general election later this year, will put on on the government to provide even more stimulus. Some lawmakers are calling for an additional budget of 26 trillion yen ($239 billion). find out more (1 dollar Equals 110.5400 yen) Takaya Yamaguchi reported; Leika Kihara and Tetsushi Kajimoto wrote; Shri Navaratnam and Jacqueline Wong edited. The Thomson Reuters Trust Principles are our standards. Continue reading

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