Japan Prime Minister Takaichi Announces Mulling No Consumption Tax on Food Items for 2 Years

The Yomiuri Shimbun

14:54 JST, January 20, 2026

Prime Minister Sanae Takaichi said at a press conference Monday that she would speed up consideration of a measure to suspend the consumption tax rate on food items for a limited two year period.

It seems that Takaichi, also president of the Liberal Democratic Party, aims to prevent consumption taxes from becoming a point of contention in the upcoming general election, as all of the opposition parties advocate for consumption tax rates to be reduced or abolished.

Takaichi stated that a supra-partisan “national council” for social security reforms, which she plans to establish after the election, will “accelerate discussions on how to achieve [the consumption tax cut], including funding sources and scheduling.”

The coalition agreement signed by the LDP and the Japan Innovation Party last October had only stated that they would “hold discussions for legislative action, including eyeing an option in which [food] will not be subjected to the consumption tax for a limited period of two years.”

The prime minister’s announcement is widely seen as a countermeasure against opposition parties. The Centrist Reform Alliance, a new party formed by the Constitutional Democratic Party of Japan and Komeito, vowed to permanently eliminate the consumption tax on food items in its policy platform announced Monday. Reducing the consumption tax was also a key pillar of the CDPJ and some other opposition parties proposed measures to combat rising prices during campaigning for last summer’s House of Councillors election.

Measures against rising prices are a major public concern. A mid-ranking LDP member said, “The prime minister likely thought that insufficient action could lead to losing support to the opposition parties.”

However, consumption tax revenue is designated for social security funding, and within the LDP, many are deeply cautious about consumption tax cuts.

At the press conference, Takaichi emphasized twice that she will consider how to cover the drop in tax revenue “without relying on special public bonds” or deficit-covering government bonds. She also presented the idea of linking the consumption tax debate with the introduction of a refundable tax credit system, which major opposition parties support.

“The two-year period will serve as a stopgap measure until a refundable tax credit system is introduced,” said a source close to Takaichi