As campaigning unfolds for Japan's 2026 Lower House election, Prime Minister Sanae Takaichi is leaning toward temporarily reducing the consumption tax on food to zero. Caution prevails within the Liberal Democratic Party over fiscal implications, with implementation hinging on post-election discussions. The move aims to address voter concerns amid opposition pushes for tax relief.
On January 31, 2026, Prime Minister Sanae Takaichi stated in a speech in Oita that the government's fiscal policy had been "excessively austere" until now, signaling her inclination toward reducing the consumption tax on food to zero. This came during a campaign speech exceeding 20 minutes, where she repeatedly urged support for her "responsible and proactive public finances," ahead of the February 8 Lower House election.
The Liberal Democratic Party (LDP) could secure a single-party majority in the lower house, per a Yomiuri Shimbun survey, but party members remain cautious. Former finance ministers Taro Aso, vice president, and Shunichi Suzuki, secretary general, have voiced strong reservations. During a January 26 party leaders' debate, Takaichi asserted implementation within fiscal 2026, but she has avoided the topic since campaigning began. A senior LDP member advised her to "refrain from making any in-depth remarks" on the issue.
According to a senior official at the Prime Minister's Office, Takaichi is concerned about market effects, such as a weaker yen. The LDP's pledge to "accelerate the discussion" on a two-year tax cut to zero was largely an election tactic to counter opposition stances, an aide noted. Judgment is suspended until a suprapartisan national council post-election, where it will be discussed alongside a "tax credit with cash payments" system to bridge differences with opponents.
The Centrist Reform Alliance (CRA), formed from the merger of the Constitutional Democratic Party and Komeito, advocates permanently scrapping the food tax, complicating consensus. One LDP member criticized: "She’s leaning too much toward cutting the tax, even though there has been no discussion whatsoever within the party." A Prime Minister's Office official emphasized it depends on future talks.
Takaichi has long advocated this as a "long-held wish," with a source close to her saying, "There’s no going back now." If enacted in fiscal 2026, it would expire in 2028, ahead of a House of Councillors election, and reversing to 8% would be politically challenging, a senior government official warned.
Social media is abuzz with discussions on consumption tax, LDP funding scandals, and security policies, potentially influencing the election outcome.
