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Japan Raises Taxes to Fund Defense Spending Amid U.S. Pressure

4/1/2026

38 7 Full Breakdown

Summary

Story summary

On April 1, 2026, Japan raised corporate taxes by 4% and started a tax hike on tobacco products to fund defense spending, targeting 1.3 trillion yen annually (869 billion corporate taxes, 212 billion tobacco taxes).
An additional 1% income tax will apply in January 2027, offset by reducing the reconstruction tax.
Prime Minister Takaichi aims for 2% of GDP in defense by fiscal 2025 under United States pressure.

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Story summary

On April 1, 2026, Japan raised corporate taxes by 4% and started a tax hike on tobacco products to fund defense spending, targeting 1.3 trillion yen annually (869 billion corporate taxes, 212 billion tobacco taxes).
An additional 1% income tax will apply in January 2027, offset by reducing the reconstruction tax.
Prime Minister Takaichi aims for 2% of GDP in defense by fiscal 2025 under United States pressure.