Prime Minister Takaichi's cabinet approved a plan to cut the consumption tax on
retail food and beverages from 8% to 1% from April for two years, part of an
election pledge to ease household cost pressures. The measure is estimated at
about 5 tln yen; under the current proposal the government would not issue new
debt to finance it and a final funding plan will be decided by year-end. The
government plans to submit the bill to an extraordinary Diet session expected
next month. The package includes subsidies for tax-exempt farmers and fishers to
offset income losses and support for restaurants to expand takeout; dine-in
sales will remain taxed at 10%.
