Japan will lower the Japan food tax cut to 1% for two years from April 2027 and provide cash payments to help families cope with rising prices.
TOKYO: Japan has announced plans to reduce the Japan food tax cut to 1% from the current 8% for two years, starting in April 2027, as part of efforts to help households deal with the rising cost of living.
Prime Minister Sanae Takaichi said the move will make everyday food and drink more affordable for families across the country. It will be the first time Japan has reduced its consumption tax since the system was introduced in 1989.
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Alongside the tax cut, the government will provide cash payments to low- and middle-income households. According to Kyodo News, the aim is to reduce the overall tax burden on these families to almost zero during the two-year period.
The measures come as many households continue to feel the pressure of higher food prices and inflation. By lowering the tax on essential items and offering direct financial support, the government hopes to ease the burden on families and encourage consumer spending.
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The Japan food tax cut is expected to take effect in April 2027 and remain in place for two years before the government reviews the policy.
Japan’s consumption tax currently stands at 10% for most goods and services, while food and non-alcoholic beverages are taxed at a reduced rate of 8%. The new plan will temporarily lower that rate to 1%.
The announcement is one of the government’s biggest cost-of-living support measures in recent years as it looks to protect household incomes while the country continues to face higher prices.
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