Japanese Prime Minister Sanae Takaichi has said she will proceed with plans for a two-year cut in sales tax on food and soft drinks, in a move designed to ease cost of living pressures but which some analysts fear could strain public finances and rattle markets.
Takaichi told leaders of the ruling Liberal Democratic Party on Thursday to put in place plans to cut the sales tax from 8 to 1 per cent from April 2027, a senior party official said. Legislation is expected to be brought before parliament in the autumn.
The tax is expected to revert to its current level in April 2029, LDP secretary-general Shunichi Suzuki said, adding that the prime minister intended “to ensure the necessary financial resources without relying on special deficit-financing bonds, in order to maintain market confidence”.