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Japan Cuts Food Tax to 1% in 2027, Costs ¥10 trillion

7/30/2026

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Summary

Story summary

Prime Minister Sanae Takaichi announced food and beverage consumption tax will fall to 1% from 8% for two years from April 2027, with cash handouts to low- and middle-income earners to make burden zero.
The plan will lose 10 trillion yen ($61 billion) in revenue over two years, raising fiscal-health concerns.
Foreign Minister Taro Kono warned the cut may not lower food prices and could spark price spikes when the rate returns.

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Story summary

Prime Minister Sanae Takaichi announced food and beverage consumption tax will fall to 1% from 8% for two years from April 2027, with cash handouts to low- and middle-income earners to make burden zero.
The plan will lose 10 trillion yen ($61 billion) in revenue over two years, raising fiscal-health concerns.
Foreign Minister Taro Kono warned the cut may not lower food prices and could spark price spikes when the rate returns.