Japan Possible Cut in Food Tax: Updated Sept. 15, 2026.

Japan PM Takaichi eyes cutting consumption tax on food to 1% from April

Ideas

The idea of a tax cut might be good, but at the same time, its going to reduce how much income is going to the government, and Japan has one of the largest, if not the largest debt to GDP ratio among advanced countries.

While cash handouts have been given out before as long as inflation continues to affect low and middle-income earners and the handouts will just be a temporary reprieve from inflation, like other handouts did.

It appears or seems to be, maybe not, but it seems like its a political move to shore-up support but at the same time maybe hasn't really been thought thru enough and haven't looked at all angles all sides of the situation.

And yes the loss government income could potentially cause havoc with social security funding down the road which is what no government should tamper with as for some or many social security is a life-line.

Most if not all Prime Ministers, like other world leaders of government, always say they will find the resources needed to offset the tax cut, but unfortunately, that rarely happens and this might be a case of Japan getting more into debt that it can't pay for and could potentially cause more stress for Japanese households over the years.

If the consumption tax is so important for the funding of social security, why would any government play around with such an important group and the potential of seeing their social security payments drop due to less funding.

It sounds like a the phrase "getting the can down the road" meaning the government will try to find funding later and its possible that the current prime minister might not be in office in the all of 2027, which means another group will have to deal with the current problem again.

Unfortunately, it seems its always later when any government, not just the Japanese government that decides what do to about future and needed funding, while society and households, globally, continue to struggle with increased inflation in most countries.

Yes, there is no guarantee is correct that the planned tax reduction will lead to lower food prices and companies will just increase costs automatically to keep their profit margins high enough to overcome the high cost of raw materials and the increase in energy costs due to the Middle East situation, which are not going to be reduced anytime soon, even if the situation were to change today, and it could take 6 months for households and businesses to see any real change.

Unfortunately, even in Japan, which is known for keeping the customer happy with quality services and quality products, are now at the point that they have to take care of themselves for the good of their businesses as they have to increase prices and now pass-on their costs to their supposed loyal customers and the days of customers being considered stakeholders with their companies are long gone.

Back 37 years ago a 3 percent consumption tax might have been a good idea as inflation might have been low and Japanese households could probably handle it and at the time, maybe Japan's debt to GDP ratio was much lower which means the government was still in relatively good shape back then, despite the supposed asset bubble crash of 1989/1990.

There might be more fiscal responsible members of the Japanese Diet, but due to political alliances and political stress most probably will not saying anything against the prime minister or her ideas.

It seems, but maybe not true, that Japan is so far behind the rest of the global business community that it can't get its retail cash resister systems quickly changed with it today's hyper technology driven societies getting cash registers changed should now be a routine change taking hours and not weeks or months or years.

And then there is the idea, recognized in cross-party talks that zero percent cut might not have been the best choice and a 1 percent but might is now the best choice for everyone involved and unfortunately government have to make decisions that are not always in the best interest of everyone as they have to make compromises again for the good of everyone.

As usual, and normal, political parties never seem to agree on much as they all have different priorities and different constituents to answer to, so its never easy to get them to compromise on much of anything these days.

Cash handouts to low to middle-income household has been tried before  while they are good temporarily they are just a temporary reprieve from the stress that low-income families have to deal with every day and not once.

There just seem to be too many items that are like "kicking the can down the road" situation as low-income households need help now and not a year or two years from now. 

Of course some might are ague that in a market economy its not really the government's job to take care of everyone as some might say its the individual or even the family that should do that.

But then there is the idea that the government should, like in many Northern European countries do, and take care of as many as possible to make life easier to live for the good of all in a society.

The ideas of the consumption tax funding some or all of social security is not a bad idea but it should be done in a way that doesn't cost too much stress on society.

Perhaps it should be done like a tax in a year or month or weekly income and it should be proportional meaning the more income a household makes the more tax will be taken out of their monthly income as a way to fund social security and of course the less income you make each month the less you pay into to fund.

But it should not be a burden for any household and should not stress out any household especially the low-income groups.

Have a nice day!

Article source:  https://mainichi.jp/english/articles/20260730/p2g/00m/0na/023000c