The Japanese government wants to secure a five-year defense budget of combined 43 trillion yen ($318 billion) and raise the annual defense and other related expenditures to 2% of the country's GDP by 2027. Japanese Prime Minister Fumio Kishida has said it would require generating an additional 1 trillion yen for the budget through tax hikes.
Senior officials of the LDP’s tax commission said they are studying a plan that will center on raising corporate taxes for small and medium-sized companies in particular, according to the broadcaster.
According to sources cited by Japanese news agency, up to 800 billion yen will be secured through higher corporate taxes and around 200 billion yen by increasing the tobacco tax under the government plan.
Japan allotted 5.4 trillion yen for defense spending in the fiscal year ending in March 2023. The defense ministry reportedly plans to boost the budget for the next fiscal year that starts in April 2023 to a record-high of 5.595 trillion yen, while some experts believe that defense spending will approach 6.5 trillion yen.