Japan has introduced tax increases to finance its military build-up, with income tax hikes set to follow in 2027. The government aims to bolster defence spending, citing a deteriorating security environment.

Japan on Wednesday raised tobacco and corporate taxes to finance a boost in defence spending, with income tax hike set to follow in 2027 as the government projects the tax increases will add some 1.3 trillion yen (US$8 billion) annually in revenue. As the security environment surrounding Japan deteriorates and the government is set to further strengthen the country’s defence capabilities, the public is likely to face further tax burdens to finance the outlays, which have now ballooned to a...