Japan's lower house passes a two-year cut in the consumption tax on food from 8% to 1%

Japan's House of Representatives passed a cabinet bill on 6 November 2026 that would temporarily cut the consumption tax on food. The LDP and Ishin groups voted in favour, and all other groups listed by the House voted against. Under the bill, the national rate on food would be 0.78% from 1 April 2027 to 31 March 2029, which NHK reports as a combined rate of 1%, down from 8%. The bill also creates an annual worker burden-relief support payment for low- and middle-income workers, set by income and the number of dependent children. For fiscal 2027 and 2028 the payment is to be sized with regard to keeping its total within the projected revenue from the reduced food rate, and it continues after the cut ends. On a system combining tax credits and benefits, the bill says only that the government will keep it under consideration. The bill rules out deficit-financing bonds and says funding will come from reviewing subsidies, special tax measures and spending and revenue generally. No specific measures were set out. A commentary based on Nikkei reporting puts the total funding need at about JPY 5tn a year, a figure not in the bill. Four LDP members, including former Prime Minister Shigeru Ishiba, left the chamber and did not vote. Yuko Obuchi cited unresolved concerns including funding, and Hajime Funada doubted that food prices would reliably fall. NHK reports that the party leadership asked them in writing to explain. Deliberation in the House of Councillors, where the LDP and Ishin groups hold 120 of 247 seated members, begins on 11 November.

The design pairs a consumption tax cut with a fixed end date with a permanent income-related payment. Whether the cut ends on schedule, and how the gap is financed, are the open questions.