Prime Minister Yoshihiko Noda on Saturday said the sales tax could be raised higher than the 10 percent rate currently proposed, due to the radical overhaul of the welfare system he is pushing.
"There is a possibility the consumption tax might be increased to more than 10 percent, as a result of implementing drastic reforms of the pension and social security systems," Noda said during a question and answer session after a speech in Tokyo.
He also reiterated his determination to pass legislation during the current ordinary Diet session that would double the 5 percent sales levy, as part of a broader package of reforms to ensure the country's welfare system remains sustainable.
The government and the ruling Democratic Party of Japan have presented opposition parties with a plan to hike the consumption tax to 8 percent in April 2014 and then to 10 percent in October 2015.
DPJ policy chief Seiji Maehara also stressed Saturday that the party's overriding objective is to increase the sales levy, warning that failure to do so could result in Japan's sovereign debt rating being downgraded and potentially send the government's borrowing rates through the roof.
"It is our duty as the ruling party to implement (the tax hike)," he said during a speech in Odawara, Kanagawa Prefecture.