By Mayumi Otsuma
Tokyo, Nov. 16 (Bloomberg) -- Japan's tax revenue will drop 4 percent in the next fiscal year from this year as a prolonged recession reduces company profits and cuts their corporate tax payments, Sankei Newspaper reported in an evening edition.
Tax revenue will amount to 47.6 trillion yen ($393 billion) in the fiscal year that starting April 1, the newspaper said, citing a Finance Ministry report submitted to the government.
That's 5.5 percent lower than the amount the ministry had projected earlier this year. The smaller-than-expected revenue will prompt the government to cut total budget spending below 80 trillion yen, down from this fiscal year's 82.7 trillion yen, the newspaper said.
Finance Minister Masajuro Shiokawa has indicated the government may raise taxes on tobacco and low-malt beer and abolish tax exemptions for companies to help make up for a shortage. The government must find new sources of revenue to pay for growing spending on health care and social welfare, he said.
The Finance Ministry last month cut its projection for this fiscal year's tax revenue by 1.1 trillion yen. LDP chief policy maker Taro Aso said this week the government will probably have to lower the projection again if the economy continues to slow.