The government will not set a ceiling for budget requests for fiscal 2015, as a decision on whether to increase the consumption tax rate to 10 percent will not be made until the end of this year, a source said Tuesday.
A 1 percentage point hike in the consumption tax boosts public revenue by around ¥2.7 trillion.
The government currently plans to increase the consumption tax rate to 10 percent in October 2015. But Prime Minister Shinzo Abe will make a final decision by year-end after taking economic conditions into account.
Regarding budget requests for the current fiscal year, the government did not set a ceiling last summer as the decision to raise the sales tax from 5 percent to 8 percent as of April 1 had not yet been made.
As for policies related to the government's growth strategy, special reserves will be established from which to allocate money for specific issues, the source said.
The government plans to seek Cabinet approval of the budgetary request guidelines as early as July. Ministries and agencies will then make budget requests by the end of August, toward the compilation of an overall budget by the end of the year.