Prime Minister Sanae Takaichi announces a plan to lower the consumption tax rate on food items at the Prime Minister's Office in Tokyo on July 30. | JIJI
JIJI
Aug 2, 2026
Since its introduction in 1989, Japan’s consumption tax has been raised three times and now accounts for about 30% of total national tax revenue, making it the nation’s largest core tax category.
Prime Minister Sanae Takaichi has championed a proposal to lower the tax rate on food purchased at stores, excluding restaurant meals, from 8% to 1% for two years starting next April, as part of measures to support households struggling with the rising cost of living. If implemented, this would mark the first-ever reduction in the tax.
Historically, the consumption tax has been a political minefield for administrations involved in its introduction or subsequent increases. Often described as a “gateway to misfortune,” the tax has played a decisive role in shaping the political fortunes of prime ministers, many of whom suffered crushing election defeats or were forced to resign.
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