While technical factors were blamed for the March decline, analysts are bracing for further slides in coming months, as the virus impact plays out in the world’s third largest economy.
The spectre of dwindling tax revenue fuels concern over more debt issuance to make up the income gap, which will, in turn, strain the industrial world’s heaviest public debt burden at more than twice the size of Japan’s $5-trillion economy.
In March corporate tax receipts rose 1.2% on the year, reflecting revenue from companies that settled accounts in January, before the virus had disrupted the economy further.
Analysts anticipate much bleaker tax collections in coming months, from companies that closed the books in March, the end of the fiscal year, when the virus took a greater economic toll.
Total tax revenue until March stood at 46.1 trillion yen ($432.86 billion), just 1.8% short of the figure a year ago.
The pandemic has pushed back by a month, to April 16, the deadline for filing annual income- and gift-tax returns to avert an end of year rush to file returns, so aggravating infection.
The delay in reporting income tax and gift tax caused receipts of such taxes to drop 45.6% to 233 billion yen, and 23.1% to 240 billion yen, respectively.
More than 3.76 million virus infections have been reported worldwide, with more than 262,458 deaths. Japan extended its state of emergency to May 31 as infections had not slowed enough.
Source: Economy - investing.com
