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BackThe Japanese government will finalize the consumption tax reduction plan for catering and food this evening
The Japanese government will finalize the consumption tax reduction plan for catering and food this evening
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自由时报50 minutes agoPolitics1 min readChinaView original

The Japanese government will finalize the consumption tax reduction plan for catering and food this evening

Japanese governmentconsumption taxtax cuts

Quick Look

  • The Japanese government is expected to finalize the outline of the tax reform through a cabinet meeting this evening.
  • It will implement a two-year temporary measure from April 2027 to reduce the food and beverage consumption tax rate from 8% to 1%, the first tax reduction since the introduction of the consumption tax in 1989, and plan measures to subsidize low- and middle-income workers and make up for the reduction in local government revenue.

AI-generated summary

Why It Matters

Since Japan introduced the consumption tax in 1989, the tax rate has been adjusted several times, but no tax reduction has ever been implemented. As prices continue to rise, the government has eased the burden on people's livelihood through tax reform.

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The Japanese government is promoting the reduction of consumption tax on catering and food. It is expected to finalize the outline of tax reform through a cabinet meeting today (15th) evening. The focus is to reduce the consumption tax rate on food and beverage from 8% to 1%. This will also be the first tax reduction since the introduction of consumption tax in 1989. The details of the relevant system have also been finalized.

According to Japan's "Kyodo News" report, as a measure to deal with the continued rise in prices, the tax reform outline clearly stipulates temporary measures for a period of two years to be implemented from April 2027. The Liberal Democratic Party has already discussed the draft reform outline at the Liberal Democratic Party general meeting before the cabinet meeting. The government will formulate relevant bills based on this outline and submit them to the extraordinary Congress convened in October. However, the extent to which the bill can gain support in Congress may become the focus in the future.

Please read on...

The draft outline clearly states that the government will provide support to small and medium-sized farmers and the catering industry that are expected to see a decrease in income due to tax cuts; the reduced income of local governments will be fully covered by the central government through special fiscal transfer measures. In addition, the outline also clearly provides leniency measures for the "total markup" that requires retail stores to mark tax-inclusive prices.

In addition to tax cuts, the Japanese government also plans to introduce a new income-related subsidy system in 2027 to support low- and middle-income workers. In 2027 and 2028, it will be implemented with approximately 600 billion yen per year, and will be expanded from 2029.

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What to Watch

AI outlook — possibilities, not facts

  • The relevant tax reform bill will be submitted to the interim Congress for review in October

    Very likely · Within weeks

  • The tax reduction measures will be implemented from April 2027 for 2 years

    Very likely · Within years

Open Questions

  • Will this tax cut be extended after 2029 or become permanent?
  • How will the central government assess the long-term fiscal impact of special fiscal transfer measures?
  • What is the specific support and opposition to this tax reform bill in Congress?

Related Topics

Japanese government
OrganizationsLiberal Democratic PartyKyodo News
PlacesJapan
Topicsconsumption taxtax cutsCateringfoodcabinet meetingtax reform
This article was originally published by 自由时报.

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