10 August 2012 Last updated at 07:38 ET

Japan parliament passes doubling of sales tax to 10%

Yoshihiko Noda has staked his political career on the controversial sales tax

Japan's parliament has passed a contentious bill to double the country's sales tax by 2015, a move that could spark an early election.

Japan's Prime Minister Yoshihiko Noda has argued the rise will help rein in Japan's huge public debt and rising welfare costs.

However, some say the tax will severely hurt consumer spending.

Opposition parties supported the bill on the condition that Mr Noda set an election date.

This was the final hurdle for Mr Noda who has fought to bring the tax to 10% since he came into power in September 2011 as part of a financial reconstruction.

It has led to disagreements even within the ruling Democratic Party of Japan, with more than 50 lawmakers opposed to the tax leaving the party.

The tax bill was passed on Friday after a last minute deal between Mr Noda and the main opposition Liberal Democratic Party.

Mr Noda has promised to dissolve the lower house "in the near term" in return for endorsement of the bill in the opposition-controlled upper house.

Most bills must pass both chambers of the Diet before they become law.