"The fiscal 2005 budget is likely to mark the turning point in government fiscal policy, shifting from cutting expenditures to increasing tax revenues," said a ranking ministry official.
The extension of this argument inevitably leads to a hike in the consumption tax.
Chief Cabinet Secretary Hiroyuki Hosoda has already referred to the need to raise the consumption tax.
With any tax-increase plan certain to become a controversial issue that may shake the government's political footing, the government's fiscal reconstruction efforts have taken a new turn burdened with "a time bomb" in the form of a consumption tax increase.
Most economists still doubt the likelihood that we will see an increase soon. The economic recovery is still fragile but, if it gathers pace, the tax take ought to increase without raising rates. However, the Ministry of Finance is desperate to get a higher consumption tax rate in place so watch this space