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TOKYO, Jan 4 (Reuters) - Japan’s tax revenues for November fell 25.6 percent from the same month a year earlier, hit by a slump in corporate earnings after the global financial crisis and underscoring the fiscal dilemma the country’s new government is facing.
Japan’s tax revenues are set to come to 37 trillion yen ($399 billion) for the fiscal year ending in March, 9 trillion yen short of initial estimates and driving new debt supply up to a record 53 trillion yen, the government announced in December.
For the next fiscal year, the government has vowed to limit new bond issuance to about 44 trillion yen on the assumption that tax revenues will stay flat.
If tax revenues drop below this estimate, it could reignite worries about accumulating public debt that is projected to reach 200 percent of GDP this year, the highest among industrialised nations, according to the Organisation for Economic Cooperation and Development.
The government is expected to fund less than half of its budget for the next fiscal year with tax revenue, which is set to fall behind new debt borrowing for the first time since World War Two.
Tax revenue in November was 5.2 trillion yen, down from 7.1 trillion yen in the same month a year earlier, finance ministry data showed on Monday.
Corporate tax revenue was 2.2 trillion yen, down 69.5 percent from a year earlier, reflecting the damage caused by the global financial crisis.
But cumulative corporate tax revenues for this fiscal year turned positive for the first time in November. In preceding months, the government refunded more taxes than it collected due to worsening corporate earnings.
In the April-November period, the ministry collected 48.9 percent of estimated total tax revenues for the full fiscal year. (Reporting by Rie Ishiguro; Editing by Joseph Radford)
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