Japanese consumers may have to help foot the reconstruction bill after last month's earthquake and tsunami caused $300 billion of damage, further burdening the hugely indebted economy, a newspaper said on Tuesday.
It would be the first increase since 1997, though a sales tax hike had been the subject of fierce political debate before the earthquake struck as one way for Japan to dig itself out of its massive debt.
The government is considering raising the tax by 3 percentage points to 8 percent when the new fiscal year starts next April, the Yomiuri newspaper reported.
"It was clear even before this disaster and the need to secure funds for reconstruction that to ensure a sustainable fiscal situation, some sort of reform of spending and revenues was necessary," said Internal Affairs Minister Yoshiro Katayama.
"The debate over the fiscal situation is not something that began with this disaster," he told reporters.
The government hopes to avoid issuing new bonds to fund an initial emergency budget, expected to be worth about 4 trillion yen ($48 billion), due to be compiled this month.
But bond issuance is likely for subsequent extra budgets which will only make it harder for Japan to rein in its debt, already running at twice the size of the $5 trillion economy.