Prime Minister Junichiro Koizumi's government could decide to raise the 5 percent consumption tax rate for implementation after the fall of 2006, when Koizumi's tenure expires, Chief Cabinet Secretary Hiroyuki Hosoda said Thursday.
"It is possible in a way that does not go against the prime minister's pledge," Hosoda told a news conference.
Koizumi has pledged not to raise the tax rate during his term as LDP president, which is due to expire in September 2006.
Hosoda's advisory panel is slated to hold its first meeting Friday to discuss ways to reform the public social security system to make it sustainable amid the nation's aging society.
The panel is expected to compile a report by the end of this year, possibly including a call for a consumption tax increase to cover rising expenses.
The consumption tax increase "might be deemed necessary after expenses for medical care, care for the elderly, and pensions are re-estimated and streamlined as a whole," Hosoda said.