Japan Slashes Food Sales Tax Amid Inflation Relief

Japan's Prime Minister Sanae Takaichi has announced plans to temporarily reduce the consumption tax on food and beverages from 8% to 1% starting in April. This move aims to help households cope with persistent inflation, which is being driven by rising import costs due to a weak yen and Middle East conflicts.

The tax reduction will remain in place for two years before reverting to the original rate of 8% in 2029. This transition coincides with targeted subsidies for lower-income workers, according to Takaichi's administration.

The temporary relief measure is estimated to cost around 10 trillion yen ($61 billion) in lost state revenue, fulfilling a central pledge from Takaichi's February election campaign.