First Read: Japan Retail Sector "Nikkei report: Council chairperson proposal..."

Research evidence excerpt

First Read: Japan Retail Sector "Nikkei report: Council chairperson proposal..."

Global Research

17 June 2026ab

First Read

EquitiesJapan Retail Sector

Nikkei report: Council chairperson proposal for Japan

food product consumption tax of 1% from April Retail

2027 Takahiro KazahayaAnalyst

takahiro.kazahaya@ubs.com

+81-3-5208 6226

Kazuki OikeSummary

Associate Analyst

Nikkei reported at 6:43pm on 17 June (JST) that a meeting of the cross-party National kazuki.oike@ubs.com

Council on Social Security was held and that chairperson Itsunori Onodera made a +81-3-5208 6964

proposal to reduce the consumption tax rate on food products to 1% for a two year

period from April 2027.

Proposal details and schedule hereafter

The chairperson's proposal includes the following measures: 1) from 1 April 2027 for a

period of two years, the consumption tax on food items eligible for reduced tax rates will

be lowered from 8% to 1%; 2) in around autumn 2027, benefits for middle- and low-

income households, with a focus on households raising children aged 15 and under, will

be implemented using the 1% consumption tax reduction as a funding source; 3)

around autumn 2029, income-linked benefits for households raising children aged 18

and under will be implemented; 4) the introduction of tax credits with benefits will

continue to be under consideration. Going forward, the National Council on Social

Security will compile a report centered on the chairperson's proposal, after which Prime

Minister Sanae Takaichi will make the final decision on the proposal's approval.

UBS view

The chairperson's proposal is for consideration of introducing tax credits with benefits

and indicates no timing for implementation, making it clear that implementation in

2029 will be difficult. Our view is unchanged.