A Liberal Democratic Party panel called Monday for converting the consumption tax into a welfare tax, a step that would certainly boost the tax rate to more than 10 percent from the current 5 percent.

In its interim report, the LDP fiscal reform study group said consumption tax revenue should be used to specifically finance social welfare costs, which center on public pension as well as medical and nursing care insurance programs.

Social welfare costs totaled some 26 trillion yen in fiscal 2004.