Prime Minister Junichiro Koizumi said Monday the government will not raise the consumption tax, which currently stands at 5 percent, in fiscal 2007.

"Given the current fiscal conditions and progress in cutting expenditures, (a rise in the tax) is unlikely in fiscal 2007," Koizumi told reporters at his office, lending support to the view that the contentious tax hike will not take place in the fiscal year starting in April 2007.

Koizumi had previously said there would be no consumption tax hike before his term as Liberal Democratic Party president expires in September 2006, but this is the first time he has ruled out an increase in fiscal 2007.

The stance, taken Sunday by top policymakers in Koizumi's ruling LDP and its coalition partner, New Komeito, is at odds with Finance Minister Sadakazu Tanigaki's desire to raise the tax as early as fiscal 2007.

Hidenao Nakagawa, chairman of the LDP Policy Research Council, said a bill to raise the tax will not be ready by the time the regular the Diet session convenes in 2007. "It is impossible to carry out a tax hike during fiscal 2007," he said.

His New Komeito counterpart, Yoshihisa Inoue, echoed this view.

Tanigaki has said he wants to submit legislation raising the consumption tax to the regular Diet session that will begin in January 2007.