Japan Announces Major Consumption Tax Cut on Food & Drinks

The big news in Japan this morning is the announcement of a reduction on consumption tax. It was formally announced last night and has dominated the news since. It is a move to ease household burdens.

The consumption tax on food and beverages will drop from 8& to 1% starting April next year (2027). Prime Minister Sanae Takaichi outlined the plan yesterday evening, describing it as a targeted relief measure for families facing rising living costs. 

The reduction is planned to last two years, with the tax returning to 8% afterward. Funding will come from non‑tax revenue sources, avoiding new debt issuance. It is a rare tax cut, the first since the tax was introduced in 1989. And one that will be felt directly in everyday shopping baskets.