Prime Minister Naoto Kan may have to raise taxes by as much as ¥7 trillion to fulfill his pledge to cap bond sales in coming years, according to an independent adviser to the government.
Kan has committed to holding new bond sales to ¥44.3 trillion through the year to March 2012. At the same time, his administration is considering an annual public-spending limit of ¥71 trillion over the coming three years, according to two government officials.
"The two targets are inconsistent," Toshiki Tomita, who has advised the government on a midterm fiscal plan that is scheduled for release this month, said Wednesday in Tokyo. "There would be a gap between revenue and spending of ¥6 (trillion) or ¥7 trillion."