Japan government considers post-quake reconstruction tax: report

TOKYO (Reuters) - Japan's government is considering introducing a special tax and issuing special bonds to help fund relief and reconstruction efforts after this month's devastating earthquake and tsunami, the Nikkei reported on Thursday.

The government is currently working on legislation that calls for the special tax and bonds and the legislation also includes clearer language that would allow the government to ask the Bank of Japan to underwrite government bonds, the paper said.

Under current fiscal law, the BOJ can directly underwrite government debt only in special circumstances.

The special tax could come in the form of a hike in the sales or corporate tax or a hike in income tax rates, the Nikkei said.

The government aims to submit the bill to parliament by the end of April, it said.

Tokyo estimates the material damage from the magnitude 9.0 quake, which unleashed a deadly tsunami on Japan's northeast coast, could top $300 billion, making it the world's costliest disaster.

The government aims to compile several extra budgets to cope with the disaster, with the first -- likely to be compiled by the end of April -- focusing on urgent steps such as removal of rubble and construction of temporary housing.

(Reporting by Rie Ishiguro; Editing by Edwina Gibbs)