Japanese Passport, Gradual Tax Increase Agreed to Secure Large-Scale Defense Budget

Training Japanese Maritime Self-Defense Force destroyer Izumo
[Image source=Yonhap News]

The Japanese government has agreed to a phased tax increase to secure a large-scale defense budget.

According to Kyodo News on the 7th, the ruling Liberal Democratic Party and its coalition partner Komeito held an executive meeting on strengthening defense capabilities and decided to increase the defense budget through expenditure restructuring and surplus funds from settlements, with the shortfall to be covered by tax increases.

However, they decided not to raise taxes for defense spending next year. Specific tax items and timing for the increase will be discussed further.

Kyodo News explained, "Corporate tax is expected to be the main focus of the tax increase," adding that "the ruling parties are considering raising 1 trillion yen (approximately 9.6 trillion won) for defense spending through tax increases by 2027."

Meanwhile, the Japanese government and ruling parties are promoting the possession of "counterattack capabilities" to strike enemy missile bases and reorganizing cyber defense posture in response to the military buildup of North Korea and China.

To this end, Japanese Prime Minister Fumio Kishida has instructed securing about 43 trillion yen (approximately 414 trillion won) in defense spending over five years.

This amount is about 50% more than the 27.47 trillion yen (approximately 264 trillion won) defense budget included in the 2019?2023 "Mid-Term Defense Capability Development Plan."