Interim Draft on 2-Year Food Tax Cut Presented

Tokyo, June 25 (Jiji Press)--The head of a Japanese suprapartisan council on social security on Wednesday presented an interim draft on a proposed cut in the consumption tax rate for food as a measure to help cushion the impact of inflation as well sa related measures.

The draft, unveiled by Itsunori Onodera, chief of the ruling Liberal Democratic Party's Research Commission on the Tax System at a working-level meeting of the National Council on Social Security, calls for reducing the tax rate to 1 pct for food for two years from April 2027.

In addition, a finely tailored cash benefit program that is linked to income levels and is equivalent to the amount of revenue from a 1 pct consumption tax rate for food will be introduced in fiscal 2027 in order to effectively reduce the tax rate to zero for food items, according to the draft.

Furthermore, it calls for a study on measures to support eating and drinking establishments that are expected to suffer adverse impacts from the tax cut.

The council aims to formalize the series of measures within this month after forging a consensus between the ruling and opposition sides. A final decision will be made by Prime Minister Sanae Takaichi.

[Copyright The Jiji Press, Ltd.]