Japan’s Prime Minister: 2-Year Tax Cut on Food Possible Without Issuing Bonds

The Yomiuri Shimbun

2:00 JST, January 25, 2026

Prime Minister Sanae Takaichi asserted that her proposal to temporarily reduce the consumption tax rate on food to zero would not require government bonds to be issued, during an interview with The Yomiuri Shimbun on Friday.

The proposal was made for the upcoming House of Representatives election, and Takaichi said, “[The financial resources] can be secured without issuing special deficit-financing bonds, as long as the measure is limited to two years.”

Takaichi, who is also the president of the Liberal Democratic Party, positioned the tax cut as a transitional measure until the introduction of a “tax credit with cash payments” system, which combines tax reductions and cash benefits. She expressed an intention to develop the design of the system through a national council comprising ruling and opposition party lawmakers.

The prime minister stressed the consumption tax’s importance, stating, “It is necessary that everyone broadly contributes to preserving the social security sytem.” She then expressed her resolve to implement the tax cut for food products for a two-year period until the tax credits with cash payment system is established.

As for financial resources to cover the tax cut, Takaichi cited a review of special tax measures and subsidies, in addition to non-tax revenues. She committed to proceeding with revisions to relevant tax laws by building a consensus with opposition parties through a national council to be convened after the lower house election.

She also vowed to push for a turnaround in economic and fiscal policies, saying, “What I will prioritize and advocate for in the lower house election is ‘responsible, proactive fiscal policy.’”

Takaichi emphasized that she would “fundamentally reform the way the national budget is created” by allocating necessary funds in the initial budget, moving away from the practice of relying on annual supplementary budgets.

Commenting on the issue of diplomacy and security, Takaichi said she would drastically strengthen security policy through an early revision of three key security-related documents. “The government will establish a more robust command center for intelligence operations, including the creation of a national intelligence agency,” she said.

Should the ruling parties fail to achieve a majority in the lower house election, “I would naturally have to step down as prime minister,” she said.

Before the lower house was dissolved, the LDP, the Japan Innovation Party and aligned independent members constituted a very slim majority. On this Takaichi said: “A stable government administration cannot be maintained without a stable majority. A few more seats are necessary to ensure stability.”