Japan’s tax revenue for the fiscal year ending in March 2025 is projected to surpass 84 trillion yen ($517 billion), marking a record high for the sixth consecutive year, according to a source with knowledge of the matter. This figure represents an increase of about 9 trillion yen from the 75.23 trillion yen collected in fiscal 2024, driven primarily by robust corporate earnings, inflation, and wage growth that supported consumption and income tax receipts.

If confirmed, the increase would be the largest annual rise on record, exceeding the previous peak of approximately 7 trillion yen in fiscal 2014, a year when the consumption tax rate was raised from 5 percent to 8 percent. The Finance Ministry is expected to publicly announce the final figures soon, possibly as early as Friday.

Consumption tax revenue is estimated to have grown by 1 trillion yen to 26 trillion yen, buoyed by higher prices and steady household spending. Income tax revenue rose by 4 trillion yen to 25.3 trillion yen, rebounding after a decline in fiscal 2024 that was attributed to a temporary tax cut introduced under then Prime Minister Fumio Kishida’s administration. Corporate tax receipts increased by 3.8 trillion yen, reaching 21.7 trillion yen.

This anticipated record tax haul comes amid government discussions about lowering the consumption tax rate on food and beverages from 8 percent to 1 percent starting in April 2027. However, the additional revenue generated in fiscal 2025 is not expected to be immediately redirected toward offsetting the potential revenue loss from such tax cuts. Instead, any surplus would be allocated to reducing government debt, financing an ongoing defense expansion, and other budgetary priorities, according to the source.

Looking ahead, the government currently forecasts tax revenue at 83.74 trillion yen for fiscal 2026 but may revise this estimate upward following the stronger-than-expected results for fiscal 2025.