TOKYO — Japan is set to cut its consumption tax on food for the first time, as Prime Minister Sanae Takaichi moves forward with a $30 billion reduction to a 1% rate. This historic tax cut aims to alleviate the burden of rising prices on households amid ongoing inflation concerns.
Despite the measure's popularity, questions remain about how the government will fund the tax cut alongside other fiscal priorities such as growth investments and increased defense spending. Prime Minister Takaichi has asserted that deficit-covering bonds will not be used to finance the reduction, emphasizing a commitment to fiscal responsibility.
A photo by Nanami Sato shows a customer shopping for food at a Tokyo supermarket in 2025, illustrating the everyday impact of food prices on Japanese consumers. Another image by Ken Suzuki captures Prime Minister Takaichi, who reiterated her intention to implement the tax cut without resorting to additional government debt.
The government’s plan to lower the consumption tax on food marks a significant policy shift as it balances easing inflationary pressures with maintaining fiscal discipline.
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