The Japan Business Federation on Friday called for the ground to be laid for a consumption tax hike in around five years so revenues can cover social security outlays.
The tax reform proposal follows a pledge by the Democratic Party of Japan-led ruling coalition to refrain from raising the consumption tax over the next four years.
The nation's largest business lobby, also known as Nippon Keidanren, also demanded that provisional parts of gasoline and other fuel taxes be repealed as planned by the DPJ.
But the group said it objects to a DPJ-planned tax to combat global warming.