Japan Press Weekly

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2025 May 14 - 20 [POLITICS]

Actual corporate tax rate for large corporations is half that of midsized companies

According to estimates of the real corporate tax burden rate, small-and medium-sized enterprises pay 18.5% and 20.6%, respectively. Large corporations, on the other hand, pay only 10.0%, roughly half of what midsize companies pay.

Showing the estimates, Japanese Communist Party Central Committee Chair Shii Kazuo, at a House of Representatives Committee meeting on May 19, noted that large corporations have the capacity to carry higher tax burdens than they do now, and stated, “Relegating a fair share of the tax burden on them will enable the government to secure the financial resources needed to cut the consumption tax rate without issuing deficit-covering bonds.”

He pointed out that the pre-tax profits of large corporations with a capital of more than one billion yen increased by 2.6 times in 2023 compared to 2012, while their burden of three key taxes (corporate tax, corporate property tax, corporate enterprise tax) rose by only 1.6 times. Large corporations’ internal reserves reached an unprecedented size, growing from 333.5 trillion yen eleven years ago to 539.3 trillion yen in 2023.

Shii said, “These facts clearly show that large corporations have a much higher taxpaying capability,” and criticized the government for giving tax breaks to large corporations, while mercilessly imposing the regressive consumption tax which negatively affects low-income taxpayers who have to struggle to carry a heavier tax burden. He demanded that the consumption tax rate be urgently returned to 5%.