Prime Minister Naoto Kan said Sunday that he wants to consider expanding the corporate tax base in parallel with a proposal to cut corporate tax rates.
Speaking on a Fuji Television program, Kan's remarks apparently signal that he may review preferential taxation for some industries.
The remarks were also thought to be aimed at countering suggestions that his Democratic Party of Japan-led government is leaning toward doubling the 5 percent consumption tax to cover the shortfall in revenues that would result from reducing corporate taxes.
The consumption tax will be a major issue in the House of Councilors election this Sunday. Both the DPJ and its main foe, the Liberal Democratic Party, say that a tax hike is inevitable if the nation expects to repair its tattered public finances.
Kan has been testing the idea, along with several variations, to see if there is any way to sway voters on the idea as the public debt continues to swell. The DPJ said last year that it will not raise the consumption tax for four years.