TOKYO (Reuters) - Japan will slash its tax revenue estimate for the current fiscal year by more than 2 trillion yen (14 billion pounds) from its initial target, a government source told Reuters, as a slump in exports caused by the Sino-U.S. trade war hits receipts.
To compensate for the shortfall, the government will issue additional deficit-covering bonds worth about 2 trillion yen in an extra budget for the fiscal year ending March 2020, two more sources said. The additional budget will be compiled this month.
The sources, with knowledge of the matter, were speaking on condition of anonymity as they were not authorised to speak to media.
“It’s true weakening earnings mainly among exporters are hurting overall tax revenue,” another source told Reuters.
The Nikkei business daily earlier on Wednesday reported that tax revenue this fiscal year would undershoot the government’s initial estimate by 2.3 trillion to 2.5 trillion yen.
The government initially estimated this fiscal year’s annual tax revenue at a record high of 62.5 trillion yen when it compiled its annual budget a year ago.
But an expected downward revision would pull that below last year’s figure of 60.4 trillion yen, one of the sources said.
Additional deficit-covering bonds will make it harder for the government to achieve a target of balancing the budget by the fiscal year ending in March 2026.
Writing by Tetsushi Kajimoto; Editing by Sandra Maler and Sam Holmes