Prime Minister Sanae Takaichi is moving toward a 1% rate on food consumption tax as she seeks to deliver on a key election promise. Discussions began in earnest on Wednesday at the national council on social security. The council includes ruling and opposition party members. Takaichi aims to gather ideas from all sides before making a final decision. The 1% rate has emerged as the fastest and most feasible option.
The Economy, Trade and Industry Ministry explained at a working-level meeting that cash register systems could handle the 1% rate within six months. Even supermarkets and department stores in regional areas could complete the necessary updates in that timeframe. Consequently, officials now believe the 1% rate could launch before the next fiscal year starts in April.
Takaichi had originally campaigned on cutting the consumption tax on food to zero. However, achieving a zero percent rate quickly proved technically impossible. Register systems could not update in time for an April rollout if bills targeted a zero rate. Therefore, the 1% rate gained traction as a pragmatic compromise. The government also plans to return about ¥600 billion gained from the 1% rate through subsidies and other channels. As a result, Takaichi can argue the tax rate becomes “effectively zero” while still honoring her pledge.
Public opinion surveys have shown favorable views of the 1% rate. A Takaichi aide described the plan as “an attractive option that would be accepted by the public.” Meanwhile, the prime minister has repeatedly stressed she will emphasize promptness and adequacy in her decision. “We’ll gather ideas from all parties and I’d like to consider ways to overcome various issues and reach a conclusion,” Takaichi told the Diet on Wednesday.
Nevertheless, significant political hurdles remain. Opposition parties reacted angrily that media reported the 1% rate plan in advance. Kazuyoshi Akaba of the Centrist Reform Alliance called the meeting “window-dressing.” LDP tax panel head Itsunori Onodera urged opposition support, saying consensus would accelerate implementation. The ruling bloc lacks an upper house majority, so opposition cooperation is essential.
Furthermore, slashing the rate to 1% now would require a seven-percentage-point tax hike two years later. LDP Secretary General Shunichi Suzuki insists the reduction will be time-limited. Yet some government officials question whether raising the rate later will prove politically possible. Drawing up a viable exit strategy remains a major challenge. The rate thus represents both a political lifeline for Takaichi’s long-held promise and a ticking clock for future fiscal decisions.
