TOKYO - Japan's ruling Liberal Democratic Party tabled a proposal on Tuesday for tax cuts amounting to 300 billion yen (3 billion US dollars) in a fresh bid to spur business investment.

Under the proposal, companies purchasing and introducing state- of-the-art and more productive equipment could enjoy tax breaks by the end of March 2017, while the existing tax incentives for research and development would be extended for another three years after they expire at the end of next March.

The tax reduction proposal is believed to be part of a broader stimulus package soon to be adopted by the Japanese government to cushion the negative impact on the economy of a planned sales tax hike.

Japanese Prime Minister Shinzo Abe was expected to formally announce the plan on Oct. 1 at the earliest to raise the country's sales tax to 8 percent in April next year as the economy has shown continuous sign of recovery.

In order to prevent the tax hike from hurting the economy, the Abe administration would also implement a stimulus package worth 5 trillion yen (50 billion dollars), including tax reduction in other areas.