Takaichi Unveils Historic Plan to Cut Food Consumption Tax to 1% for Two Years

Prime Minister Sanae Takaichi announced on July 30, 2026 a plan to temporarily cut Japan's consumption tax on food and non-alcoholic beverages purchased at stores (excluding restaurant dining) from 8% to 1% for a two-year period starting April 2027, alongside cash handouts to lower-income households. If enacted, it would be the first-ever reduction in the politically sensitive consumption tax since its 1989 introduction. Takaichi pledged the cut would sunset on schedule, restoring the rate to 8% after two years, framing the move as inflation relief ahead of a widely anticipated snap election. Food and beverage stocks rallied on the announcement.