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The Japan Times
Takaichi’s Cabinet approves consumption tax cut on food
The Cabinet led by Prime Minister Sanae Takaichi has approved a controversial reduction of the food consumption tax from 8% to 1% set to begin next April for two years. This policy, endorsed by most of the Liberal Democratic Party (LDP), aims to mitigate economic pressure on low- and middle-income families. However, significant opposition exists within the LDP, which fears the potential negative economic and political fallout from such a drastic change to the tax structure. This approval paves the way for legislative action in the upcoming parliamentary session.
MonitorConfidence: MediumShort term horizon
Published 5 Aug 2026, 07:45 UTC1 min read
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Summary
TL;DR
- Japan to reduce food consumption tax from 8% to 1% over two years.
- Approval aims to aid low- and middle-income households.
- Decision follows LDP campaign pledges from recent elections.
- Considerable opposition from within the Liberal Democratic Party.
- Legislation to amend tax law will be introduced in autumn.
Interesting facts
- This tax cut is one of the most significant changes in Japan's tax policy in years.
- The planned legislation aims to make the effective tax rate zero for eligible families.