The Japanese government is considering a new increase in corporate tax to provide funds for large-scale programs to strengthen the country's defense capabilities. The plans include mass production of various types of unmanned aerial vehicles and the creation of larger stocks of ammunition to allow for prolonged combat operations, Kyodo reported.
According to the information, Japan's military spending in the fiscal years from 2027 to 2031 could reach an unprecedented 80 trillion yen, or over 506 billion USD at the current exchange rate.
The specific parameters of future military programs must be set out in updated basic national security documents, which the government intends to adopt by the end of the year.
The current documents were approved in 2022 and provide for a significant expansion of Japan's defense capabilities. Among the key areas is the acquisition of missiles with a longer range, including the already deployed “Type-25“ missiles with a range of about 1,000 km, which can reach targets in parts of the continental coast of East Asia.
Tokyo is also allocating significant funds for the purchase of fifth-generation F-35 fighters and Tomahawk cruise missiles from the United States, as well as for the continuation of the construction of surface missile ships and submarines. About 43 trillion yen, or over 272 billion USD, is planned for the current program for the period from fiscal 2023 to 2027.
Part of the increased defense spending is already being financed through higher excise taxes on tobacco products and corporate taxation. The Japanese government is now considering the possibility of further increasing the tax on private business profits.
However, such a step may encounter resistance from Japanese companies. Business leaders warn that the higher tax burden could limit opportunities for wage increases and at the same time reduce the international competitiveness of Japanese companies.
The planned spending shows the scale of the shift in Japan's defense policy. The country is rapidly increasing its military capabilities, placing increasing emphasis on long-range missiles, unmanned systems, ammunition stockpiles and the modernization of its navy and air force.