TOKYO, March 12 (Reuters) - Japan should consider including tax cuts to boost demand in a new economic stimulus package aimed at shoring up the economy, a senior ruling party official told Reuters on Thursday.
The official also said the size of the new stimulus plan will be "considerable" and it will require new issuance of government bonds, though he did not specify the amount.
"If we are to take further tax steps (in the new economic package), they should help to boost demand," Hiroyuki Sonoda, the No.2 in the ruling Liberal Democratic Party's policy research council, said in an interview.
"It (the economic package) will be a considerable size, so we can't do it without issuing new government bonds," Sonoda said.
Calls for the government to compile an additional economic stimulus plan have been growing as a sharp contraction in gross domestic product in the fourth quarter fuelled fears of an economic free-fall.
Although Prime Minister Taro Aso has already proposed a 75 trillion yen ($775.2 billion) package, part of which was passed into law last month, ruling party officials and government ministries are seeking additional steps to prevent the economy from falling deeper into recession. ($1=96.74 Yen) (Reporting by Yuzo Saeki; Editing by Michael Watson)