The head of the Japan Business Federation (Nippon Keidanren) stressed Friday the importance of lowering the corporate tax to help spur the economic recovery, arguing it would lead to growth in revenue for the government and help trim the massive national debt.

"By supporting economic growth first (by lowering the corporate tax), income and corporate tax revenues would increase," Keidanren chief Hiromasa Yonekura said during a luncheon speech at the Japan National Press Club in Tokyo.

The remarks followed media reports that the government may try to cut the corporate tax, which effectively stands at 40 percent, by 5 points.

But at the same time, the government is reportedly considering a review of a tax waiver related to naphtha and an exemption on the corporate tax for companies in the red.

Such ideas won't revitalize industries as the government claims, Yonekura said. "There would be no good effect on the economy."

Asked about possible levying the tax on companies that are losing money, Yonekura said just thinking about it 'should definitely be stopped."

Keidanren has been pushing for a cut in the corporate tax, arguing that what it says is a relatively high rate here puts Japanese companies operating globally at a competitive disadvantage.

The nation's biggest business lobby also argues that the government relies too heavily on corporate tax revenue and that the 5 percent consumption tax is too low.

"The consumption tax should be raised to 10 percent at least, and then to the high teens or higher in the mid-2020s," he said, adding hiking the sales tax is an ideal way to up revenue as it would have only a moderate impact on the economy.