TOKYO - Japan's tax commission will propose the introduction of an environment tax from October 2011 to help curb greenhouse gas emissions, the Nikkei business daily said, a move seen boosting annual revenue by about 240 billion yen ($2.9 billion) in four years.

The panel will call for a gradual increase in the tax on fuels to avoid imposing a sharp increase in tax burdens, and expects to raise 40 billion yen in the first year, the Nikkei said without citing sources.

Related readings:  China may start environment tax trial  Nobelist urges deep cuts in CO2 emissions  Share emissions reduction burden

Once the levy is fully in place, the environment ministry expects the tax burden for each household to grow by 1,207 yen a year, the Nikkei said.

Taxes on crude oil and petroleum products will eventually rise by around 790 yen per kiloliter; taxes on liquefied natural gas will increase by about 810 yen per ton; and coal taxes will rise by roughly 700 yen per ton, the paper said.

The government aims to compile its tax guidelines for the next fiscal year, which will serve as the basis for a draft of the next fiscal year's budget, which is due later this month.

Japan, the world's fifth-biggest greenhouse gas emitter, has pledged to cut emissions by 25 percent from 1990 levels by 2020 if all major emitting countries adopt similar ambitions.