The Japanese cabinet has passed a plan to double sales taxes in an attempt to control the soaring costs of public debts.
Approval from Parliament is needed for the plan which will see taxes raised from the current 5% to 8% in April 2014 and then to 10% by October 2015.
Social security costs in Japan are forecast to rise by 1 trillion yen ($US12.6 billion) per year as the population ages.
An estimated 40% of the population will be of retirement age by 2060.
However, the plan is unpopular with opposition parties and within the ruling Democratic Party of Japan.
Japan is struggling to rebuild its economy after the financial impact of the earthquake and tsunami on 11 March last year.
The Cabinet office estimated that the disaster could cost the country between $US198 - $US309 billion.
National debt is currently at 228% of GDP, at $US10.5 trillion.
The BBC reports the new legislation will be put before the parliament for approval in March.