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Japanese Prime Minister Fumio Kishida is considering a temporary income tax cut as part of a package of measures to cushion the economic blow from rising living costs, public broadcaster NHK reported on Thursday.
Any such move could add to Japan's already ballooning public debt and run counter to the International Monetary Fund's calls for countries to scale back crisis-mode big fiscal spending, analysts say.
Kishida will instruct ruling coalition officials as early as Friday to look into the idea of a temporary income tax cut, NHK reported, without citing sources.
The prime minister had earlier announced plans to compile an economic stimulus package that would likely include an extension of subsidies to curb gasoline and utility bills.
Some ruling party lawmakers have been calling for income tax cuts to be included in the package, as rising fuel and raw material prices increase the cost of living for households.
Cabinet approval of the package has been delayed till Nov. 2 from the previously planned late October timeframe, two government and ruling party officials told Reuters on Thursday, confirming an earlier report by Kyodo news agency.
The delay in approving the package could affect the Bank of Japan's new inflation forecasts, due at its Oct. 30-31 meeting, as the length of extension in the subsidies will not be clear by the time the central bank board meets.
Government officials were not immediately available to comment.
Kishida's administration has seen approval ratings slide as rising inflation hit households. A poll by the Asahi newspaper, conducted on Oct. 14-15, showed the rating slump to 29% from 37% in the previous survey in September, with 69% saying they did not hold high hopes over the scheduled stimulus package. (Reporting by Takaya Yamaguchi and Kantaro Komiya; Writing by Leika Kihara; Editing by Muralikumar Anantharaman, Miral Fahmy and Gareth Jones)