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Japan to lean heavily on extra tax revenue to cover costs of extra budget

Japan will lean heavily on extra tax revenue in a ¥13.9 trillion ($92 billion) additional budget to finance Prime Minister Shigeru Ishiba’s stimulus package, according to people familiar with the matter.

The extra budget will partly be funded by ¥3.83 trillion in higher-than-expected tax receipts and unused funds from the previous year, limiting the need for additional bond issuance to ¥6.69 trillion, according to the people. The budget, which is slightly larger than last year’s, may spark questions about the necessity of such extensive spending given recent relatively solid economic growth.

Before unveiling the package, Ishiba had indicated he’ll deliver an extra budget that’s larger than last year’s, in an apparent attempt to bolster his popularity ahead of the general election. This year’s additional budget marginally exceeds former Prime Minister Fumio Kishida’s ¥13.2 trillion plan last year, suggesting Ishiba was trying to spend the minimum amount needed to keep his campaign promise.

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