The ruling coalition basically agreed Monday on halving the fixed-rate income tax cuts during fiscal 2005 and abolish the cuts in fiscal 2006, senior ruling party lawmakers said.

The cuts were introduced in 1999.

The effective tax hike, intended to bolster the nation's faltering finances, is one of the major pillars of tax reform planned for fiscal 2005, which begins in April. The plan is due to be adopted Wednesday by the Liberal Democratic Party and its junior partner, New Komeito.