The government is considering expanding an existing tax break program for companies raising employees' wages, sources have said.

The industry ministry will include plans to expand the program in its tax system reform proposal for fiscal 2024, which starts next April, the sources said Friday.

Under the current program, companies are categorized into those with capital of more than ¥100 million and those with capital of ¥100 million or less.

If the larger companies increase total employee pay by a certain percentage or higher, up to 30% of the increased amount can be deducted from their corporate tax payments. The smaller companies can enjoy a deduction of up to 40%.

The ministry is now considering dividing the larger firms into two to create a new category of midsize firms with capital of less than ¥1 billion, and making them eligible for tax breaks if they increase total employee pay even by a smaller percentage.

The ministry also plans to extend the program until 2030 to encourage companies to continue raging wages. The program is currently scheduled to expire at the end of fiscal 2023.