September 2, 2022

The amount of internal reserves held by large corporations with more than one billion yen in capital assets increased by 17.5 trillion yen from the previous year to 484.3 trillion yen in FY2021, according to an Akahata calculation based on the Financial Ministry’s corporation statistics released on September 1.

In addition to the prolonged COVID-19 pandemic, Japan has been experiencing a price surge associated with the yen’s accelerating depreciation since the beginning of this year. This delivered a devasting blow to smaller businesses and people’s livelihoods. In contrast, big businesses, exporting corporations in particular, earned record-high profits thanks to the weak yen and thus dramatically increased their internal reserves.

The Japanese Communist Party in February published a proposal aimed at adding 10 trillion yen to the nation’s revenues by taxing large corporations’ internal reserves. The JCP proposal seeks to use the 10 trillion yen in additional tax revenues to provide financial support for small- and medium-sized enterprises in order to realize a substantial raise in the minimum wage. Furthermore, the proposal is designed to enhance large corporations’ motivation to offer higher wages and make green investments by giving tax credits for costs for pay hikes and capital investments.

The urgent need is to realize the JCP proposal for imposing taxes on large corporations’ internal reserves.

Past related article:
> JCP calls for taxing large corporations’ internal reserves to implement pay hikes and ‘green investments’ [February 25, 2022]