The Japanese government has decided to cut the food tax rate to 1% for two years starting in April 2027, down from the previous rate of 8%. This decision aims to ease the burden on low- and middle-income households, with the added benefit that their effective tax burden will be 0%. The government is committed to finding funding sources without using bonds and will determine them during the fiscal year 2027 budget process. While welcomed positively by some players in the food industry, this policy has also raised concerns among restaurant owners who are worried that their sales will decline due to lower taxes on takeout food. The Japanese government plans to submit a tax reform bill to an extraordinary parliamentary session this coming autumn.
