Japanese Prime Minister Shinzo Abe said on Monday the government should discuss revisions on tax laws after observing results of fiscal retrenchment and social security costs.

Abe revealed his plan to not increase sales tax as part of the scheduled tax revisions at the beginning of the next fiscal year in March in response to questions by Yukio Hatoyama, secretary general of the main opposition Democratic Party, during a floor session in the Lower House.

Abe said discussions on broader tax revision, including the sales tax, will likely begin not earlier than fall 2007.

The ruling Liberal Democratic Party carefully deals with a rise in the sales tax as the party experienced severe economic recession due to a rise of sales tax from three to five percent in 1997, followed by its election rout and a change in prime minister.

Japan