{
  "id": 12995042,
  "title": "Cabinet OKs bill for 1st consumption tax cut in step toward Diet passage",
  "url": "https://urgent.news/2026/10/09/cabinet-oks-bill-for-1st-consumption-tax-cut-in-step-toward-diet",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-09T00:41:53.000Z",
  "source": {
    "name": "The Mainichi",
    "slug": "the-mainichi",
    "url": "https://mainichi.jp/english/articles/20261009/p2g/00m/0na/030000c"
  },
  "original_language": "en",
  "account": "Japan's Cabinet has approved a bill to temporarily reduce the consumption tax on food and beverages, marking a significant step toward passage in the ongoing Diet session. Effective from April, the tax rate on such products will drop from 8% to 1% for a two-year period. Additionally, the legislation includes an income-linked cash benefit system aimed at supporting lower and middle-income earners. This is the first reduction in the consumption tax since its introduction in 1989. The government hopes the legislation will be enacted during the current extraordinary Diet session, which runs until December 12.\n\nPrime Minister Sanae Takaichi has endorsed the measures as the most effective way to assist the public grappling with inflationary pressures. However, the implementation is expected to result in a loss of approximately 10 trillion yen ($63 billion) in tax revenues over the two-year span. The government asserts that the necessary funds will be secured without resorting to deficit-financing bonds, though specifics on how this will be achieved remain unclear. This has raised concerns about Japan's already precarious fiscal health, which ranks among the worst among advanced economies. Opposition lawmakers have voiced concerns over the method of covering the projected shortfall and have criticized the criteria for determining who will receive the benefits as insufficiently defined.\n\nThe Cabinet approved the consumption tax cut proposal in August, following a green light for a broader tax reform package the previous month. This legislation served as the foundation for the current proposal. Since 2019, the standard consumption tax rate has been 10%, with a reduced 8% rate applied to food and beverages, excluding alcoholic drinks and dining out.",
  "summary": "TOKYO (Kyodo) -- Japan's Cabinet on Friday approved a bill to temporarily cut the consumption tax on food and drink and implement an income-linked cas",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}