/www.bloomberg.com/ By Mayumi Otsuma and Hideki Asai
Tokyo, Nov. 6 (Bloomberg) -- The Japanese government may have to compile a supplementary budget because tax revenue will probably fall short of its projected level, Finance Minister Masajuro Shiokawa said.
``We may have to eventually discuss an extra budget,'' Shiokawa told a parliamentary committee. ``It seems strongly likely that this fiscal year's tax revenue will be less than the level we have projected.''
Shiokawa's comments raise the prospect of government bond sales to make up the shortfall in revenue for the fiscal year ending March 31. Such sales would break a pledge by Prime Minister Junichiro Koizumi to cap this fiscal year's new debt sales at 30 trillion yen ($246 billion).
The government estimates the national debt of the world's second largest economy will rise to 140 percent of gross domestic product by March, the highest in the developed world.
Moody's Investors Service in May lowered its rating on Japan's yen-denominated bonds by two levels to A2, saying the government hasn't done enough to control its debt.
Shiokawa said he is ``very worried about'' a revenue shortage. Tax revenues are down because of a decline in revenue from income and corporate taxes, he said.
Koizumi has already signaled he may have to break his pledge. He said over the weekend that he would decide whether to draft an extra budget ``after looking at the situation of tax revenue and the economy'' and would ``take flexible measures.''
The government last December forecast 46.82 trillion yen in tax revenue for the current fiscal year ending March 31, a 7.7 percent drop from a year before.
The finance minister is scheduled to release revised estimates of this fiscal year's tax revenue in mid-November.