The House of Representatives passed a bill Thursday to enable the government to execute an emergency tax hike to secure funds for rebuilding Tohoku from March quake and tsunami.
The Lower House, where Prime Minister Yoshihiko Noda's ruling Democratic Party of Japan holds a majority, voted for the bill before debate in the opposition-controlled House of Councilors.
The bill will now be sent to the Upper House, where Noda could see it passed as early as next week with help from major opposition parties, which have been discussing the conditions with the DPJ.
The bill would allow the government to temporarily increase some taxes and use the proceeds to service the special government bonds being planned to finance additional spending on rebuilding areas devastated by the March 11 disasters, which also triggered the ongoing crisis at the Fukushima No. 1 nuclear power plant.
The Diet last week approved the ¥12.10 trillion third extra budget for fiscal 2011 to that end.
The government plans to increase the income tax for 25 years from January 2013, after first cutting the corporate tax rate and then raising it for three years in a way that would not allow the new rate to top the previous one. This will effectively support companies.