Chief Cabinet Secretary Yasuo Fukuda sounded a hopeful note Tuesday that tax cuts could be introduced by the end of March.
Members of the ruling coalition want tax cuts this fiscal year, while Prime Minister Junichiro Koizumi has yet to make his position public.
"We think it is important to iron out (an antideflationary package) with the ruling bloc" by taking into consideration the calls for tax cuts by the end of the current fiscal year," Fukuda said.