With the highest debt-to-GDP ratio among industrial nations at 150 percent -- and set to worsen as an ageing population raises the cost of social spending -- and as interest payments on existing debt keep growing, government of officials are hoping to raise the 5 percent tax levied on consumer goods and services in a few years.

Finance Minister Sadakazu Tanigaki, who has urged a decision to be made in the fiscal year starting next April, said on television that further cuts in spending and debt issuance were necessary but not sufficient to turn around the governments finances.

"From now we must find a path towards fiscal reform through changes in both spending and revenue, and the discussion of taxes cannot be avoided."

Economics and Financial Services Minister Kaoru Yosano agreed with Tanigaki in a separate television programme on Sunday.

"We must not let on with the illusion that spending cuts alone can fix Japan's fiscal situation," he said.

But Heizo Takenaka, Minister of Internal Affairs who is also in charge of postal reforms, told Yosano in the same TV Asahi show that the government should first focus on other means of improving its fiscal health.

"At some point we will need to discuss taxes," he said. "But what needs to be done first is to cut spending, and followed by the sale of government assets. Tax hikes should come after that. We must deliberate things in the right order."