Japan's ruling bloc on Thursday gave green light to tax reform policies for the fiscal year 2014 starting April and agreed to increase taxes on company employees to help recover the country's sluggish fiscal health, according to local media.

However, the ruling Liberal Democratic Party and its small ruling partner the New Komeito Party did not reach an agreement on the time to lower tax rate on daily necessities in an effort to balance impacts would be brought by planned sales tax hike to 10 percent in 2015, reported Japan's Kyodo News.

According to the reform guideline, the ruling bloc also agreed to increase tax rate burden on workers who make more than 12 million yen (about 177,050 US dollars) a year from 2016 and on those earning over 10 million yen (97,540 dollars) from 2017 by trimming tax credits.

The move is expected to suffer fierce reaction as about 1.72 million Japanese make more than 10 million yen a year, said the report.

The reform plan will also put an end to special corporate tax surcharge introduced to fund reconstruction work following the March 2011 earthquake and tsunami one year earlier than scheduled at the end of next March.

It will also introduce tax breaks to invigorate capital spending and research and development in "strategic special zones, " which the government plans to establish to attract more people and investment from home and abroad.