Japan's Takaichi Cabinet Cuts Food and Drink Consumption Tax to 1% from April 2027 for Two Years; Ishiba and
On August 5, 2026, the Takaichi cabinet formally approved a plan to reduce the consumption tax on food and beverages to 1% for two years starting April 2027. The decision faces internal LDP opposition from former Prime Minister Shigeru Ishiba and others, who cite unclear funding sources. The move follows the LDP's 2026 election pledge to accelerate a zero tax rate on food.
The Takaichi cabinet decided on August 5, 2026, to lower the consumption tax rate on food and beverages to 1% for a two-year period starting in April 2027. The decision was formally approved at a cabinet meeting that day.
Within the Liberal Democratic Party, opinions are divided. A majority of lawmakers support the consumption tax cut, but former Prime Minister Shigeru Ishiba, former Foreign Minister Taro Kono, former Defense Minister Tomomi Inada, and former Election Strategy Committee Chairperson Yuko Obuchi have emphasized their opposition, mainly on the grounds that funding sources remain unclear. In the February 2026 House of Representatives election, the LDP had campaigned on a pledge to "accelerate the realization of a zero consumption tax rate on food," and won a landslide victory with voter support based on that promise. After the election, Ishiba and others raised objections, taking a stance different from the campaign pledge.
In terms of historical context, the Takeshita cabinet stepped down about two months after introducing the consumption tax. During the Abe cabinet's process of raising the rate from 8% to 10%, implementation was postponed twice, citing global economic conditions and other reasons.