Expected significant reduction in tax revenue in Corona Local allocation tax Focus on next year's budgeting October 5, 4:30
With the impact of the new coronavirus, tax revenues are expected to decline significantly next year, and the Ministry of Internal Affairs and Communications wants to secure the same amount of local allocation tax as this year to support the finances of local governments, which is one of the focal points of next year's budgeting. It looks like it will be one.
Due to the spread of the new coronavirus infection, tax revenues in the national and local governments are expected to decrease significantly next year.
The Ministry of Internal Affairs and Communications is requesting a budget for the next fiscal year, which is about 16.2 trillion yen for the local allocation tax that supports the finances of local governments.
Local allocation tax is funded by a certain percentage of income tax and corporate tax, but it is expected to fall by more than 10% compared to this year's budget, so the Ministry of Internal Affairs and Communications will make up for this by 2.1 trillion yen. We are requesting a special addition.
The special addition of local allocation tax is the first in three years, and it seems that it will be one of the focal points of budgeting next year to see how much the request of the Ministry of Internal Affairs and Communications will be accepted.
On the other hand, the Ministry of Internal Affairs and Communications estimates that local tax revenues next year will decrease by 3.6 trillion yen from this year.
For this reason, the policy is to have local governments temporarily borrow money on behalf of the national government, called "temporary financial measures bonds," and it is expected that the impact on local public finances next year will be unavoidable.