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2026-09-15 15:44:09
[Japanese Cabinet Approves Temporary Reduction of Food Consumption Tax to 1% for Two Years, No New Debt Issuance but Financing Plan Delayed] (1) Prime Minister Sanae Takaichi's cabinet has approved a plan to temporarily reduce the food consumption tax, moving toward fulfilling a key election promise aimed at easing the burden on households due to soaring living costs. (2) The cabinet approved an annual tax reform plan that calls for a reduction in the sales tax on food and beverages from 8% to 1% for two years, starting in April. (3) Under the proposal, the government will not issue new debt to finance this approximately ¥5 trillion measure, but the decision on how to finance the tax cut will be postponed until the end of the year. (4) The government plans to submit the relevant bill to the extraordinary session of the Diet scheduled to convene early next month. (5) The proposal also includes support for some affected industries: farmers and fishermen exempt from consumption tax will receive subsidies to offset income losses, and restaurants will receive assistance to introduce or expand takeout services. (6) Although the tax rate on food sold by retailers will be reduced to 1%, dine-in services at restaurants will continue to face a 10% tax rate.
