Taxes, Developed Markets

Japanese Businesses (Finally) Pay the Taxman

By, 09/19/2006

The Japanese government is going to have a fat wallet. That's because corporate profit tax receipts in Japan are poised to overtake personal income tax contributions for the first time in 18 years. Corporate taxes make up about one quarter of Japan's total tax base, far higher than most other western countries where income and sales tax receipts account for a bigger share. So far, Japanese corporate tax collection is already running 50% ahead of last year.

Big tax receipts are a symptom of a thriving economy. Many companies in Japan haven't paid taxes in years because they've carried forward losses from bad loans, investments, etc. These figures highlight the strong return to profitability of Japanese companies—another signal the Japanese economic recovery is for real.

*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

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*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

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