Japan Takaichi administration to cut food consumption tax to 1%

The Takaichi administration has officially decided to reduce the consumption tax rate on food and beverages from 8% to 1% for a two-year period starting in April 2027. This policy, approved in a cabinet meeting on August 5, 2026, aims to support household purchasing power and stimulate consumption amidst rising prices.

The decision to implement a 1% rate rather than a 0% rate was reportedly made to minimize technical complications for businesses regarding accounting and POS systems. The measure is designed as a