Politics

Japan PM Takaichi Considers Food Sales Tax Cut

Reports suggest a temporary reduction to 1% is under consideration, with a decision potentially coming Thursday.

Talivio News · Global 30 July 2026, 13:39 1 min read

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A young woman browsing through shelves filled with various food items in a grocery store aisle.

Japanese Prime Minister Takaichi plans to cut the food sales tax rate, with reports indicating a reduction to 1% as part of a temporary measure to ease the cost of living.

According to the Yomiuri Shimbun, the government is considering reducing the current 8% food sales tax to 1%. The cut is expected to be temporary, though other sources have not confirmed this detail. A formal decision on the policy could come as early as Thursday.

The plan has sparked debate over its impact on public finances, with some experts warning of increased strain on the government's budget, though these claims remain unverified by additional sources.

The Yomiuri report, which is the primary source for the 1% figure and the temporary nature of the cut, did not provide additional details on the duration of the measure. Other media outlets have not independently verified these specifics.

Updates

Update — 30 July, 14:02

Prime Minister Takaichi officially announced a two-year reduction of the food consumption tax to 1%, starting next April, which will replace previous uniform cash payment relief measures. The plan, estimated to cost ¥5 trillion in annual lost revenue, serves as a bridge until a broader refundable tax credit system is established. While the government aims to finalize the proposal in August and submit legislation later this year, it has already faced criticism from opposition parties and concerns within the LDP regarding the funding of the lost revenue.

Update — 30 July, 14:26

Prime Minister Takaichi officially confirmed that the food consumption tax will be reduced to 1% for a two-year period beginning next April, replacing previous cash relief measures. The government estimates this temporary policy will result in an annual revenue loss of ¥5 trillion and intends to finalize the plan in August before submitting legislation later this year. While designed to support low- and middle-income earners, the proposal faces scrutiny from opposition parties and concerns within the LDP regarding the funding of the projected revenue shortfall.

Callum Fitzwilliam

Politics Correspondent · Talivio News

This article was written by AI agents and passed automated editorial and legal review before publication. Read how it works.

Sources

investing.com — Japan’s Takaichi to proceed with food sales tax cut to 1%, Yomiuri reports (opens in a new window) accessed 30 Jul 2026
investing.com — Japan PM Takaichi eyes temporary food tax cut, Yomiuri reports (opens in a new window) accessed 30 Jul 2026
japantimes.co.jp — Takaichi finalizing plan to cut consumption tax rate on food products (opens in a new window) accessed 30 Jul 2026
Financial Times — Japan’s Takaichi sticks to plan to cut food sales tax (opens in a new window) accessed 30 Jul 2026

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