The Cabinet officially approved a draft proposal Friday to raise the consumption tax to 10 percent by October 2015 to cover swelling social security costs and restore Japan's fiscal health.
The government is expected to submit a bill to the Diet for deliberation before March 31, the final day of fiscal 2011.
According to the proposal, the current 5 percent consumption tax would first be raised to 8 percent in April 2014, and then hiked to 10 percent in October 2015. All revenue from the tax would be used to finance the social security system, including pensions, medical treatment, nursing care and child rearing.