The government's tax panel kicked off debate Tuesday on tax reform proposals for fiscal 2007 under its new chairman, with easing burdens on companies and abolishing breaks for capital gains expected to be the main agenda items.

The Tax Commission, an advisory panel to Prime Minister Shinzo Abe, formally elected Osaka University professor Masaaki Homma as its new chairman.

Abe told the meeting it is necessary to review the tax system in terms of both macroeconomic and microeconomic perspectives.

"We need to analyze how taxation will affect the country's economic and fiscal condition as well as companies and households," he said.

Following the meeting, Homma told a news conference he plans to work closely with the Economy and Fiscal Policy Council, a key economic-policy panel.

"If possible, I would like to have our tax panel members attend the Economic and Fiscal Policy Council when it discusses a framework for the taxation system," Homma said.

Asked about the consumption tax, Homma suggested the panel will not take up the issue for the time being in line with the government's decision to shelve debate until next fall, in consideration of its political impact on the House of Councilors election in July.