News

Japan Cabinet Approves Cut of Food Tax to 1%

Two-year price relief

Written and analysed by Ryusei Hosono • • Updated: September 15, 2026
japan-cabinet-approves-food-tax-cut-2027

A flat editorial illustration in a limited palette of red, navy, cream, and tan. At the center, a large red arrow points downward, marked with a white 1%, hovering over a navy bowl piled with groceries: a head of leafy greens, a red tomato, a mound of white rice, a baguette, and golden stalks of rice grain. More food sits around the bowl, including a milk bottle, two round red fruits, and a carton holding white eggs. To the right, the silhouette of Japan's National Diet Building anchors the scene in government, while a blossoming plum branch in the upper left gives it a Japanese feel. The whole image reads as a statement about the cost of food being cut to one percent by Japan's legislature.

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Japan Cabinet Approves Cut of Food Tax to 1%

Table of contents:

    TL;DR

    Japan's Cabinet has approved a policy to reduce the consumption tax on food and beverages from 8% to 1% for two years starting April 2027, as a measure against rising prices.

    Japan's Cabinet has approved a policy to cut the consumption tax on food to 1 percent from April 2027 for a period of two years, according to NHK WORLD-JAPAN.

    Key Details of the Tax Cut

    The measure is part of Japan's Tax Reform Outline, which reduces the consumption tax rate on food and beverages from 8 percent to 1 percent. The cut is designated as a two-year temporary measure starting in April 2027 and is aimed at easing the burden of rising prices on household finances.

    Support for Primary Industries

    In addition to the tax reduction, the draft outline includes support measures for workers in agriculture, forestry, and fisheries.

    Next Steps in the Legislative Process

    Once the Tax Reform Outline receives Cabinet approval, the government plans to submit related legislation to the extraordinary Diet session convened in October. A senior official from the Liberal Democratic Party Tax Research Commission had informed multiple party officials of the approval schedule in advance.

    Challenges Ahead of Implementation

    While the tax cut is intended to reduce the burden on households amid rising prices, numerous issues remain to be resolved before implementation, including:

    • The impact on public finances from reduced tax revenue
    • The economic effects of restoring the tax rate after the two-year cut expires

    The approval marks a significant step in the government's response to price increases, though the practical and fiscal details of carrying out the temporary reduction are still to be worked out.

    Sources and further reading

    1. NHK WORLD-JAPAN — Japan cabinet approves food tax cut policy
    2. BigGo Finance News — Japan to Cut Consumption Tax on Food and Beverages to 1%
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