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TOKYO, June 2 (Reuters) – Japan is considering rolling out a two-year cut to an 8% \u200clevy on food sales from April next year, \u200cthe Mainichi newspaper reported on Monday, citing an unnamed government executive.<\/p>\n
The \u200btimeframe will allow Prime Minister Sanae Takaichi’s administration to promote the tax cut ahead of municipal elections slated for April 2027, the paper said.<\/p>\n
The sales tax \u200crate is likely to \u2060be cut to 1% instead of the initially planned 0% to avoid the lengthy \u2060time needed to fix cash register systems to recognize a zero tax rate, the paper reported. The \u200bprime minister’s \u200bofficial residence was not \u200bimmediately available to comment.<\/p>\n
Japan \u200clevies an 8% consumption tax on food and a 10% rate on other goods and services, key sources of funding for rising social welfare costs among a rapidly ageing population.<\/p>\n
Takaichi pledged in January to scrap \u200cthe 8% levy on food \u200bsales for two years to \u200bhelp households weather the \u200bpain from rising living costs. Details \u200cof the plan will be \u200bworked out in \u200ba meeting of ruling and opposition parties.<\/p>\n
Her announcement on the tax cut caused a spike in \u200bbond yields \u200cin January as investors saw the plan as \u200bworsening Japan’s already tattered finances.<\/p>\n
(Reporting by Leika \u200bKihara; Editing by Sam Holmes)<\/p>\n<\/p><\/div>\n