TOKYO (REUTERS) - Japan's tax revenue topped US$437 billion (S$553 billion) in the last fiscal year to March, its highest level in four years, the Ministry of Finance said on Wednesday, as the government's sweeping stimulus policies helped boost the economy and corporate earnings.
Bigger-than-expected tax revenue led to budget reserves worth 1.29 trillion yen (S$16 billion) for the last fiscal year, which could be tapped for additional spending the government may seek in the current year to March 2014.
The government is likely to compile an extra budget for the current fiscal year ending next March to cushion a blow to the economy from a planned sales tax hike next year, government sources told Reuters last month.
With additional spending likely to complicate its efforts to fix public finance, the government will seek to limit extra borrowing by using budget reserves from the last fiscal year.
Tax revenue for the last fiscal year reached 43.9 trillion yen, the highest level since the fiscal year to March 2009, when the collapse of US investment bank Lehman Brothers triggered the global financial crisis.
The amount was 1.32 trillion yen more than an earlier estimate by the finance ministry, as a weaker yen and higher share prices caused by the government's reflationary policies boosted corporate tax and personal income tax receipts.
Tax revenue has exceeded government's initial budget estimate for three years in a row. The government usually compiles next year's annual budget in December and settles the accounts a few months after the end of the fiscal year.
Tokyo plans to double the 5 per cent sales tax in two stages - to 8 per cent in April 2014 and to 10 per cent in October 2015 - with the caveat that the plan will go through only if the economy is deemed strong enough to cope with the impact.