Nov. 12 (Bloomberg) -- Masaaki Honma, chairman of the tax panel of Japan's Ministry of Finance, said the government plans to revise depreciation rules that have changed little since the 1960s.

``We are thinking of first working on the depreciation system, since it hasn't been changed for a while,'' said Honma, an Osaka University professor of economics, speaking on NHK television today.

The government is considering ways to make Japan's rules on corporate asset depreciation internationally competitive by allowing for the full value of assets to be depreciated in less time.

Honma also said the country's value-added sales tax, called a consumption tax, may not be raised as much as expected.

``The Koizumi cabinet wanted the rate of increase in the consumption tax to be as small as possible, and the Abe administration has followed suit,'' Honma said. ``Tax revenue is increasing considerably, mostly through corporate income taxes, and the consumption tax increase may not need to be so big.''

The tax panel will also consider whether the government needs to increase the personal income tax, now a maximum of 37 percent, for those in high earnings brackets.

Economic and Fiscal Policy Minister Hiroko Ota, appearing on the same television program, said ``it's important to discuss ways to keep the tax increase as low as possible in the next five years.''

To contact the reporter on this story: Kae Inoue in Tokyo at kinoue@bloomberg.net; or Keiichi Yamamura in Tokyo at kyamamura@bloomberg.net

Last Updated: November 12, 2006 01:38 EST