Japan's ruling Liberal Democratic Party proposed cutting the consumption tax on food from eight percent [1] to one percent [2] starting April 1, 2027.

The plan seeks to fulfill a campaign promise of an "effectively 0%" tax rate to reduce the cost of living for citizens. By maintaining a one percent rate rather than a full exemption, the government intends to collect approximately 600 billion yen [3] in tax revenue.

According to the proposal, these funds will be redirected as cash giveaways to low- and middle-income households [4]. The government expects to implement these payments in the autumn of 2027 [5]. The tax reduction is intended to be a temporary measure lasting for two years [2].

Itsunori Onodera, the LDP tax committee chair, said the party intends to hold multiple working-level meetings next week to discuss the interim summary of the plan.

However, the proposal has met immediate resistance from opposition parties. Motohisa Furukawa, the tax committee chair for the Democratic Party for the People, said that almost no discussion had taken place regarding the use of a one percent tax for benefits. He said that the government is rushing ahead without a concrete plan despite various confirmed concerns.

The proposal was presented during a working-level meeting of the National Council on Social Security. Prime Minister Takaichi (LDP) is overseeing the broader effort to balance tax relief with targeted social spending.

“the government is rushing ahead without a concrete plan”

This strategy represents a compromise between direct tax cuts and social welfare. By avoiding a total 0% tax rate, the LDP maintains a funding mechanism to target aid specifically toward vulnerable populations, though the lack of prior consultation with opposition parties suggests a volatile legislative path ahead.