Economy and fiscal policy minister Kaoru Yosano said taxes must be part of funding quake reconstruction, as polls indicate public support for increasing levies to pay for rebuilding.
"Of course our borrowing must be backed by taxes," Yosano, 72, said Thursday. While a sales tax increase "is one possibility we could explain to people, the government hasn't made any progress on discussions."
Policymakers are grappling with ways to pay for relief after the March 11 quake and tsunami without exacerbating a debt burden that is near 200 percent of gross domestic product. Sixty-nine percent of people said they would support an increase in levies to fund rebuilding, according to a Nikkei newspaper survey released this week.