Japan's government is reportedly considering raising corporate tax to fund a rise in defense spending, according to Japan Today citing sources familiar with the matter. The option comes as Japan revises three key security policy documents by year-end, which would likely push defense outlays above 10 trillion yen (about $63 billion) annually. The next five-year plan, covering fiscal 2027 through 2031, will focus on large-scale drone procurement and securing ammunition and missiles for a prolonged conflict, with a rough official estimate putting total spending at 70 trillion to 80 trillion yen. Businesses may resist a tax increase over concerns about wage growth and international competitiveness, and it remains unclear whether enough revenue can be raised. Defense spending for fiscal 2023 through 2027 is projected at about 43 trillion yen, and the 2% of GDP target for fiscal 2027 was reached ahead of schedule in fiscal 2025 after Sanae Takaichi became prime minister.
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