Tokyo: According to a document seen by Reuters on Thursday (Dec 12), Japan’s government intends to increase the nation’s major taxes beginning in April 2026 in order to finance additional defense spending following a one-year delay.
According to the plan, the nation’s business tax and tobacco tax will be eliminated as early as April 2026, fulfilling former Prime Minister Fumio Kishida’s pledge to increase taxes in order to double defense expenditure to 2% of GDP by 2027.
A four percent surtax would be imposed on corporations, and a one percent surtax would be imposed on income taxes. Prior to three increases in the overall tobacco tax through April 2029, the tax on heated tobacco will be raised to match the rate on cigarettes.
The catastrophe reconstruction income surtax rate will be lowered by 1% to mitigate income tax obligations. The government predicts that in the year beginning in April 2027, the tax increases will increase revenue by ¥1 trillion (US$6.56 billion).
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