Japan's 1% food tax cut raises alarm for restaurant sector

The Japanese government plans to lower the consumption tax on food items to 1% for a two‑year period starting next April, while keeping the tax on meals served in restaurants at 10%. Prime Minister Takashiro presented the cut as a temporary measure before moving to a tax‑credit system.

Opposition leader Tamaki of the Democratic Party of Japan criticized the proposal, saying the government had not calculated its impact on farmers and small food‑service businesses. Agriculture Minister Suzuki also admitted that no estimate of the burden on these sectors has been made.

Analysts warn that the 9‑percentage‑point gap could drive consumers away from eating out, exacerbating an already strained restaurant industry that recorded a record 900 bankruptcies in 2025 amid rising ingredient and labor costs.