ROME (REUTERS) - Italian Prime Minister Enrico Letta pledged on Friday to seek all possible ways of avoiding a planned increase in sales tax, which is scheduled to rise by one percentage point in October.

"I will do everything to avoid it," he told a rally of his centre-left Democratic Party in the northern city of Genoa.

Letta's fragile coalition government, which this week agreed to scrap a deeply unpopular housing tax, needs to find an additional 1 billion euros to pay for revenue that would be lost by not hiking the sales tax.