The nonpartisan National Council on Social Security is discussing challenges over a planned consumption tax cut for food items, including when to introduce the step.
Although Prime Minister Sanae Takaichi aims to implement a two-year food tax rate reduction to zero percent within fiscal 2026, it would take a year to make cash register systems compatible with such a rate.
Some are calling for implementing a tax rate of 1% instead of fully shelving the tax, so that the system updating process becomes easier. Others are proposing scrapping the tax cut plan altogether, which is regarded as a stopgap measure before introducing a refundable tax credit system.
