Japan is set to cut its tax revenue forecast on the current fiscal year for over 2 trillion yen ($18.41 billion) due to a decline in exports caused by the US-China trade war, a government source said.
To compensate the deficit, the Japanese government will release more deficit-covering bonds of almost 2 trillion yen from an extra budget in the current fiscal year. The additional budget is set to be gathered this month.
The sources spoke in anonymity as they had no authorization to speak about the matter.
“It’s true weakening earnings mainly among exporters are hurting overall tax revenue,” said another source.
Previously, Nikkei business daily reported that the government’s tax revenue this current fiscal year will fall short of 2.3 trillion to 2.5 trillion from the initial estimate.
A year ago, the Japanese government estimated 62.5 trillion yen of tax revenue for this fiscal year when it the annual budget was compiled.
However, an unexpected downward revision pulled that estimate to a figure less than last year’s 60.4 trillion yen, sources said.
More deficit-covering bonds will make it hard for the Japanese government to maintain its target of balanced budget by the fiscal year that ends in March 2026.