Prime Minister Junichiro Koizumi on Tuesday ordered his key policy-setting panel to draw up a draft bill featuring tax cuts worth more than 1 trillion yen and future tax hikes aimed at offsetting revenue shortfalls.

Koizumi issued the order at a meeting of the Council on Economic and Fiscal Policy, according to Heizo Takenaka, state minister in charge of economic and fiscal policy.

The 11-member panel, which Koizumi chairs, includes economics ministers and members of the private sector.