Prime Minister Takaichi to decide on 1% food tax cut after stalled talks
Japan’s ruling and opposition parties failed to reach agreement on a food-and-drink consumption-tax cut, leaving Prime Minister Sanae Takaichi to make the final call.
Cross-party discussions on trimming Japan’s consumption tax for food and drinks ended without consensus, pushing the matter to Prime Minister Sanae Takaichi. She is slated to instruct the Liberal Democratic Party to advance a plan that would cut the rate to 1 percent from the current 8 percent for two years beginning April 2027. The ruling bloc originally promised a zero-rate but adopted the 1 percent figure to allow retailers about six months to reprogram cash registers, a faster timeline than a full zero cut.
Opposition parties offered cash handouts and a permanent tax reduction as alternative measures. Takaichi, described as a fiscal dove and facing declining poll numbers, pledged to file the related bills promptly, hoping the public will quickly feel the relief. The proposal is framed as a “transitional measure” until a new income-linked relief program for low-income workers takes effect in fiscal 2029, which the council has already approved.
Why it matters
The decision will affect food prices for Japanese consumers and influence the government's strategy to combat inflation.
In this story
Related stories
3 in this thread