Overview
- The cross-party Social Security National Council, which met Wednesday, heard that dropping the consumption tax on food to zero would cut local revenue by about ¥2 trillion a year.
- Separate estimates put the total loss from reducing the current 8% food rate at roughly ¥5 trillion in national revenue, with about 40% of that tied to local budgets.
- Representatives for governors, mayors, and towns said shortfalls would strain money for medical care, nursing care, and child support, and they asked Tokyo to spell out replacement funding.
- Japan Chamber of Commerce chief Ken Kobayashi urged caution and favored benefit-attached tax credits, warning that a broad cut could worsen public finances and spur a weaker yen and higher interest rates.
- Local officials noted they already face uncertainty after other levies were scrapped in 2025, and they said the consumption tax is a key, stable source for social programs that is hard to swap out.