TOKYO (Kyodo) -- The government will cut its tax revenue estimate for fiscal 2019 from 62.50 trillion yen ($575 billion), possibly by more than 2 trillion yen, as a result of weaker-than-expected corporate earnings amid a slowdown in the global economy, government sources said Thursday.
The downward revision is expected to prompt the government to issue debt to compile a supplementary budget for the year through March to finance reconstruction in areas hit by a series of natural disasters, the sources said.
As a spate of Japanese firms have cut their earnings forecasts amid fallouts from the prolonged U.S.-China trade conflict, corporate tax revenue is expected to fall in the fiscal year, the sources said.
For the first half through September, corporate tax revenue dropped 9.1 percent from a year earlier, according to Finance Ministry data.
The downgraded estimate, the first in three years, is also affected by a tax refund to SoftBank Group Corp. worth around 400 billion yen, the sources said.
Japan's tax revenue hit a record 60.36 trillion yen in fiscal 2018, and the government earlier forecast tax revenue would top that in the current fiscal year following the consumption tax hike on Oct. 1.
Japan's economy has shown signs of weakening, however. Growth in gross domestic product slowed down in the July-September period from the previous quarter on weak consumer spending and exports, the government said earlier in the day.