Reply #8: Corporates to become top tax payer in Japan

[ozymandius]

The amount of corporate tax paid by Japanese companies is for the first time in 18 years likely to exceed the amount of income tax paid by individuals, highlighting the role corporate profits have had in underpinning Japan's lengthy recovery.

According to data compiled by the Nikkei newspaper, companies should pay comfortably more than the Y13,100bn ($111bn) budgeted by the finance ministry in the year to April 2007. In the three months to July, corporate tax collection is already running 50 per cent ahead of last year, as corporate earnings improve and deferred tax assets - or previous losses carried forward - decline, it says.

Last year, corporations paid Y11,500bn in tax compared with Y13,200bn collected from income tax. Total tax and stamp duty came to Y44,000bn, leaving the government needing to issue Y34,400bn in bonds.

The figures highlight the strong return to profitability of Japanese companies, which have managed to retain most of their gains without passing them on to workers in the form of higher wages. Although the labour market has become tight, with more jobs than job-seekers, wages have hardly risen, although bonuses have improved.

http://news.yahoo.com/s/ft/20060918/bs_ft/fto091820060210297522