What is Prime Minister Sanae Takaichi's announced plan regarding the food sales tax in Japan, and when is it set to take effect?

Prime Minister Sanae Takaichi has conveyed her intention to cut the sales tax rate on food items from 8% to 1% for two years starting in April next year; the government plans to finalize this plan in a cabinet meeting in early August and submit related legislation during an autumn parliamentary session.

Why is the food sales tax cut being introduced, and what concerns have been raised about it?

The tax cut is intended as a temporary measure to cushion the impact of rising living costs, preceding the introduction of a new payout system targeting low- and middle-income households; however, it has drawn pushback from both ruling and opposition lawmakers due to concerns over its impact on Japan's worsening fiscal situation, especially since the administration has not explained how it will offset the resulting revenue shortfall.

Japan's Takaichi to proceed with food sales tax cut to 1%, Yomiuri reports

Jul 28, 2026

Prime Minister Sanae Takaichi plans to cut food sales tax from 8% to 1% for two years starting next April to address living costs. The cabinet will finalize the plan in August despite fiscal concerns raised by lawmakers.

reuters

2026-07-27

Takaichi’s Looming Tax Cut Plan Risks Weighing on Yen, JGBs

2026-07-28

Japan's Takaichi to proceed with food sales tax cut to 1%, Yomiuri reports

2026-08-04

Japan's Ruling Party Approves Takaichi's Food Tax Cut Plan Despite Fiscal Concerns

Japan's Takaichi to proceed with food sales tax cut to 1%, Yomiuri reports

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