The Finance Ministry is estimating that tax revenues for the next fiscal year will be around 47.6 trillion yen, 2.8 trillion yen below the 50.4 trillion yen projected in the midterm outlook, officials of the ruling Liberal Democratic Party said Friday.
Meanwhile, Finance Minister Masajuro Shiokawa said his ministry may consider raising the tobacco tax to help boost revenues for fiscal 2002.
The ministry's estimate was presented to an advisory board meeting of the LDP's tax panel earlier in the day.
Behind the lower estimate is the possibility that tax revenues will fall short of the original projection for this fiscal year as well. The current year's estimate is used as the basis for the following year's tax projection.
The ministry also attributed the reduced estimate to a likely drop of some 2 trillion yen in revenues from taxes on interest rate income, as the peak maturity period for a massive amount of postal savings has ended, the officials said.
"When it comes to the hike in tobacco tax," Shiokawa said, "the people's objections may be weaker. . . . It could be considered as a supplementary revenue source."
A tax hike of 1 yen per cigarette would raise overall tax revenues by around 240 billion yen, according to a ministry estimate. The ministry may consider raising the tax by 1 yen to 2 yen per cigarette, or 20 yen to 40 yen per pack.