Japan's finance minister said Tuesday that the government has not picked a way to pay for a possible increase in defense spending, as officials assess military needs and the spending level required.
At an Oct. 20 news conference in Tokyo, Finance Minister Satsuki Katayama said officials were still reviewing the capabilities Japan needs. Reuters and Bloomberg reported that she said a funding plan should provide dependable revenue while accounting for fiscal sustainability. Bloomberg reported that Katayama did not endorse a corporate tax increase at the news conference.
The question follows a Kyodo News report on Oct. 17, citing unnamed government sources, that an additional corporate tax increase had emerged as a possible funding option. The report did not establish a tax rate, start date or new spending total.
Japan's current Defense Buildup Program sets spending of about ¥43 trillion across fiscal years 2023 through 2027. It lists spending reforms, budget surpluses, nontax revenue and tax measures among its funding approaches. The program covers ¥8.8093 trillion of the broader ¥9.0353 trillion defense-related budget for fiscal 2026, which the Finance Ministry says is 3.8% higher than the prior year.
Japan Business Federation Chairman Yoshinobu Tsutsui said in September that companies already contribute to the current buildup through corporate taxes. He called for controlling spending pressures across policy areas and for dialogue with the private sector, while saying businesses were open to discussing a further contribution.
Defense Minister Shinjiro Koizumi has said Japan plans to revise its three strategic defense documents by the end of 2026.
