This document explains a research paper analyzing the impact of Japan's tax reforms implemented in phases from 2015-2018 on corporate tax burdens.
The research uses corporate tax return data from FY2014-2020 to analyze how tax reforms affected companies' average tax burdens, particularly examining whether they reduced tax burdens for growth companies. The methodology calculates backward-looking effective tax rates (ETRs) and estimates the sensitivity of ETRs and their components to companies' sales growth rates, R&D intensity, and other corporate attributes.
The analysis reveals three key findings: First, companies' average ETRs increased after the reforms. Second, compared to the overall average ETR, growth companies and R&D-intensive companies experienced ETR declines during the initial reform period but subsequently increased. Most notably, the long-term conclusion shows that tax burdens for growth companies did not decrease due to tax base expansion.
The research team consists of RIETI Faculty Fellow Kaoru Hosono, Masaki Hotei from Daito Bunka University, and Daisuke Miyakawa from Waseda University, conducted as part of the "Corporate Dynamics and Industrial/Macroeconomic" research project. The paper was published in August 2025 as Discussion Paper 25-E-072.
The article is evaluated as revealing important policy implications that Japan's tax reforms did not deliver the expected benefits to growth companies, based on empirical data analysis.