The government's Tax Commission reached a basic agreement Tuesday to scrap special tax breaks on aged people's savings, commission officials said Tuesday.

The "maruyu" scheme exempts people aged 65 and over from a 20 percent tax on interest and yields earned on bank deposits, postal savings and public bonds worth up to 3.5 million yen each or 10.5 million yen in total.

Abolishing this exemption is expected to encourage the elderly to channel more money into stocks and other financial instruments.