Japan considering rolling out sales tax cut in April 2027: Report

TOKYO — Japan is considering rolling out a two-year cut to an eight per cent levy on food sales from April next year, the Mainichi newspaper reported on Monday (June 1), citing an unnamed government executive.

The timeframe will allow Prime Minister Sanae Takaichi's administration to promote the tax cut ahead of municipal elections slated for April 2027, the paper said.

The sales tax rate is likely to be cut to one per cent instead of the initially planned zero per cent to avoid the lengthy time needed to fix cash register systems to recognise a zero tax rate, the paper reported.

Economy Minister Minoru Kiuchi declined to comment, when asked about the media report in a news conference.

Japan levies an 8 per cent consumption tax on food and a 10 per cent rate on other goods and services, key sources of funding for rising social welfare costs among a rapidly ageing population.

Takaichi pledged in January to scrap the eight per cent levy on food sales for two years to help households weather the pain from rising living costs. 

Details of the plan will be worked out in a meeting of ruling and opposition parties.

Her announcement on the tax cut caused a spike in bond yields in January as investors saw the plan as worsening Japan's already tattered finances.

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