The Japanese Cabinet on Tuesday approved legislation to temporarily cut the consumption tax rate on food and beverages to 1% from 8% for two years starting April 1, 2027, according to a Tuesday release.

The government note said the new tax reform will apply to food and beverages covering fiscal 2027 and fiscal 2028 and is transitional, with income-linked benefits planned in fiscal 2029.

The government also plans an income-linked benefit equivalent to 1% of the consumption tax on food and beverages in fiscal 2027, reducing the burden on low- and middle-income working individuals.