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Tax Reforms for Growing Firms? Evidence from corporate tax filing data in Japan

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  • Kaoru HOSONO
  • Masaki HOTEI
  • Daisuke MIYAKAWA

Abstract

Using tax filing data of Japanese business enterprises from 2014 to 2020, we investigate how the 2015-2018 tax reforms in Japan affected the average tax burden and whether the reforms benefited growing firms or not. We first calculate backward-looking effective tax rates (ETRs) and then estimate the sensitivity of the ETR and its components with respect to firm sales growth, R&D intensity, and other characteristics. Our findings are as follows. First, the average ETR increased after the reform. Second, compared with the average ETR, ETRs for growing and R&D-intensive firms initially decreased, but then began to increase. The reforms did not benefit growing firms in the long run due to the expansion of tax bases.

Suggested Citation

  • Kaoru HOSONO & Masaki HOTEI & Daisuke MIYAKAWA, 2025. "Tax Reforms for Growing Firms? Evidence from corporate tax filing data in Japan," Discussion papers 25072, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:25072
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