Tax revenue for Japan in April slumped by 29.4% in comparison to what the country recorded in April last year. This goes down as the lowest monthly year-on-year tax revenue the world’s third largest economy recorded since August 2009.
Due to coronavirus pandemic Japan’s government had earlier pushed back payment of taxes. On the other end, analysts are claiming the authority might be forced to grant a further extension due to prolonged time which the pandemic might last.
The finance ministry attributes this tax revenue decline to delay of the deadline for filing annual tax returns including income tax. Further the ministry claims this delay in income tax filling resulted to a 88.5% drop in receipts tax filings.
The experts are claiming if the situations goes on for an extended time then it will increase the possibility of a further public borrowing to cater for the income gap not withstanding currently Japan is among major economies with huge public debts with its debt now being double its economy.
Japan’s Prime Minister Shinzo Abe, says a second supplementary budget will be tabled in parliament to finance a new $1.1 trillion stimulus package to further help the country come out of the deep biting pandemic.
The announcement was treated with an uproar from several analysts who claim further burdening the country’s public debt situation may not be a good at the moment and might result to more harm.
A senior analyst at Sumitomo Mitsui Trust Bank, Ayako Sera is worried on how sustainable is Japan’s public debt in relations to the country’s GDP. She says in the long term accumulation of additional debts might be unsustainable.
“Taking a long-term view, it will be necessary to take a proper look at the fiscal deficit,” added Sera.