- Japan plans to cut the consumption tax on food from 8% to 1% for two years, starting in April 2027 and running through March 2029.
- The temporary food tax cut is part of an inflation-relief tax reform package; after it ends in April 2029, the government plans income-based payments for low
- and middle-income households.
- The measure is expected to reduce annual tax revenue by about 5 trillion yen.
- The government says it will not use deficit-financing bonds to cover the revenue loss, but has not yet identified replacement funding; talks on alternative financing are postponed until year-end.
- Tax reform legislation is expected to be submitted to an extraordinary Diet session in October, with passage targeted by the end of 2026.
Source: newsonjapan.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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