Japan Press Weekly

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2016 June 8 - 14 [POLITICS]

PM’s claim that ‘Abenomics contributed to increase in tax revenues’ is blatant lie

Prime Minister Abe Shinzo is boasting that thanks to his economic policy “Abenomics”, Japan’s tax revenue has increased by 21 trillion yen. However, Akahata revealed on June 8 that his claim is false.

The government recently compared tax revenues in fiscal 2012, when PM Abe took power, with the estimated tax revenues in fiscal 2016. According to that calculation, the revenue from national taxes increased by 15.3 trillion yen and the revenue from local taxes also went up by 5.5 trillion yen, which amounted to 20.8 trillion yen in total.

In April 2014, the Abe administration raised the consumption tax rate from 5% to 8% in defiance of mounting public opposition. The increase of 21 trillion yen in tax revenues includes nine trillion yen from the consumption tax hike.

Since the sales tax increase, personal consumption in Japan has gone down for two straight years. Japan’s GDP registered negative growth in fiscal 2014 and also fell far short of the government prediction in fiscal 2015. It is a sophism for PM Abe to claim the consumption tax hike, which gave a nasty blow to the Japanese economy, to be the “fruits” of Abenomics.

On top of that, the base fiscal year of 2012 is when tax revenues dropped dramatically in the aftermath of the collapse of Lehman Brothers in 2008 and the Great East Japan Disaster in 2011. The revenue from taxation was down by half to 8.8 trillion yen in fiscal 2012 from 16.4 trillion yen in fiscal 2007. Even the giant carmaker Toyota Motor Corporation did not pay any corporate taxes between 2008 and 2012.

The expected corporate tax revenue in fiscal 2016 stands at 12.2 trillion yen, which is only three quarters of the corporate tax revenue in fiscal 2007. This indicates that in spite of the implementation of Abenomics, business incomes in Japan are still far from the level before the 2008 financial crisis.

PM Abe should stop trying to deceive the general public with his manipulation of statistics.

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On the very day Akahata pointed to this deception, PM Abe abruptly retracted his statement. At a speech meeting held in Tokyo, the prime minister said that as a result of his economic policy, Japan’s tax revenue is expected to increase by 13 trillion yen, not by 21 trillion yen.

Past related article:
> Abe should acknowledge failure of ‘Abenomics’ and cancel consumption tax hike plan [March 25, 2016]