Food Tax at 1%: ¥108 Becomes ¥101, 6.5% Off (April 2027)

The short answer: a ¥1,000 pre-tax food item goes from ¥1,080 to ¥1,010, ¥70 cheaper

If the pre-tax price stays the same, the saving is 7% of the pre-tax price. Measured against the tax-inclusive price, it is 6.5%.

* This site's calculation at 8% and 1%, with fractions of a yen rounded down. Rates and period follow the NTA Q&A[NTA Q&A, Q1-1, in Japanese].

6.5%, not 7%: the formula when you start from the tax-inclusive price

"From 8% to 1% means 7% cheaper" is true only against the pre-tax price. Against the tax-inclusive price you pay at the till, the drop is 6.5%.

The divisor is 108 because today's price already contains 8% tax. On ¥10,000 of shopping, think of about ¥648 rather than ¥700.

• If you know the pre-tax price: pre-tax × 0.07 is the saving
• If you only know the tax-inclusive price: tax-inclusive × 7 ÷ 108 is the saving
• For mental arithmetic: take two-thirds of 10% off the tax-inclusive price

This assumes the base price is unchanged. If the shop raises the base price, the saving shrinks by that much.

What today's tax-inclusive price tags become: a quick table

Supermarket price tags show tax-inclusive prices. Working back from today's price gives the following.

* This site's guide, assuming the base price is unchanged. The pre-tax price is worked back and fractions are rounded down. Actual prices can differ by a few yen depending on each shop's rounding and pricing.

The NTA Q&A itself uses a ¥108 item becoming ¥101 in its price tag example[NTA Q&A, Q3-9, in Japanese]. Round prices such as ¥198 and ¥298 become odd figures like ¥185 and ¥278. This is the price band where shops are most likely to re-round their prices.

Fractions of a yen vary by shop: rounding down and rounding off are both allowed

When a tax-inclusive price has a fraction below ¥1, whether to round down, round up or round off is up to the business[Ministry of Finance FAQ on tax-inclusive pricing, in Japanese]. The same ¥198 pre-tax item can be ¥199 in one shop and ¥200 in another.

• ¥198 pre-tax × 1.01 = ¥199.98 → ¥199 if rounded down, ¥200 if rounded off or up
• Items at ¥99 or less before tax can show the same number before and after tax when rounded down (99 × 1.01 = 99.99 → ¥99)
• The tax amount on a receipt is rounded only once per receipt for each tax rate[NTA invoice Q&A, in Japanese]

Even if single price tags differ by ¥1, the total at the till is calculated per tax rate. Rather than comparing a few yen between shops, checking whether the base price has stayed the same matters more for your budget. How to read the receipt breakdown is covered in receipts after the 1% cut and spotting opportunistic price rises.

By monthly food spending: ¥50,000 a month saves about ¥39,000 a year, ¥100,000 saves about ¥78,000

Multiply your monthly spending on food eaten at home (excluding eating out and alcohol) by 7 ÷ 108. Pull the supermarket and convenience store food spending from your household accounts or card statements.

* This site's estimate, assuming base prices are unchanged. Food spending is tax-inclusive and excludes eating out and alcohol.

The figures match how much households gain from the 1% food tax, which estimates the effect from the scheme and household survey averages. An average household of two or more (about ¥74,500 a month excluding alcohol and eating out) saves about ¥58,000 a year. Use this quick table to plug in your own food spending.

Only food now taxed at 8% goes to 1%: alcohol, eating out and medicines stay at 10%

The 1% rate covers the same range of food and drink that was taxed at 8% up to 31 March 2027[NTA leaflet, in Japanese]. The current line for the reduced tax rate (軽減税率) carries over as it is.

Newspaper subscriptions published at least twice a week stay at 8%, not 1%[NTA Q&A, Q1-1, in Japanese]. A single shop's receipt has never shown 1%, 8% and 10% together before, but it can happen at shops that sell newspapers.

For borderline items such as mirin or snacks with a free toy, see 30 cases where 8% or 10% is hard to call.

When do price tags change? From February to May, the tag and the till can differ

For shops that cannot swap tags in time, a special rule on tax-inclusive price display (総額表示) applies from 1 February to 31 May 2027[NTA Q&A, Q3-9, in Japanese]. What is allowed is not a pre-tax display, but a tax-inclusive price at either 8% or 1%.

Shops using the rule must prevent confusion, for example with a notice saying "Prices on this shelf include 8% tax. We charge 1% at the till." A pre-tax price alone, or a price followed only by "+ tax", is still not allowed in this period.

• If you buy in March after seeing a 1% tag, the till may charge more at 8%
• Shelves still showing 8% tags in April and May ring up cheaper at the till
• The same rule applies from 1 February to 31 May 2029, when the cut ends

Subscriptions and mail orders that straddle 1 April can stay at 8% even for deliveries after April. If you use a regular delivery service, check the tax rate on the April bill.

If a shop does not cut its prices, look at the base price

Some shops may keep the tax-inclusive price unchanged after the cut. In that case, it is the same as raising the base price by 6.9% (the inverse of 101 ÷ 108). Raising base prices because of costlier ingredients or logistics is the shop's own decision.

• Tax-inclusive price kept: still ¥108 → base price effectively up from ¥100 to about ¥107
• Partial cut: ¥108 → ¥104 → base price effectively up to about ¥103
• Full cut: ¥108 → ¥101 → base price unchanged

Compare with the previous base price, not the previous tax-inclusive price. Keep a few receipts from March, and you can compare the base prices of items you buy often with those after April.

Who gains less, and what to watch out for

The quick tables give bigger figures the more food you buy to eat at home. Some people do not fit that picture.

• People who mostly eat out: eating out stays at 10%. The gap between eating in and taking away widens to 9 points. See eating out versus takeaway: a 9-point gap
• People who spend a lot on alcohol: alcohol stays at 10% and is not part of the saving
• It ends after two years: the rate returns to 8% on 1 April 2029. With ¥100,000 a month on food, costs rise by around ¥6,481 a month from then. For the debate on payments in that year, see the return to 8% in April 2029
• The bill has not passed yet: the Diet could still amend it. No application is needed, so be wary of any notice saying you must apply to get lower prices

A consumption tax cut saves more for households that spend more on food. Meanwhile, lower-income workers are to receive a separate payment in advance, within the amount equal to the 1% cut. Conditions and how to receive it are in how to receive the worker burden relief payment.

Summary

• If the consumption tax on food drops from 8% to 1%, tax-included prices fall by about 6.5% — not 7%.
• For food priced at ¥1,000 before tax, the tax-included price drops ¥70 from ¥1,080 to ¥1,010; an item currently ¥108 becomes ¥101.
• The period would run two years, from April 1, 2027 to March 31, 2029 — contingent on the bill passing.
• If your household food spending is ¥50,000 a month, you save about ¥39,000 a year; at ¥100,000 a month, about ¥78,000 a year.
• Alcohol, dining out, and medicine remain at 10%. From February 1 to May 31, 2027, the price tag and the register may show different tax rates.

References (sources)

• Cabinet Secretariat, outline on the temporary cut in the consumption tax rate on food and drink and the worker burden relief payment (Cabinet decision, 15 September 2026) (in Japanese)
• NTA, special site on the consumption tax rate cut (in Japanese)
• NTA, Q&A on the two-year consumption tax rate cut on food and drink (September 2026): Q1-1 (rate and scope), Q3-9 (price display rule) (in Japanese)
• NTA leaflet on the two-year consumption tax rate cut on food and drink (in Japanese)
• NTA Tax Answer No.6902, mandatory tax-inclusive price display (in Japanese)
• Ministry of Finance, main questions on tax-inclusive price display: rounding fractions below ¥1 (in Japanese)
• NTA invoice Q&A, rounding the tax amount on qualified invoices (in Japanese)

* The quick tables and spending estimates apply the NTA's rates and are this site's approximations. They describe what applies if the bill passes and may change during Diet debate. This article is general information. For individual decisions, consult a tax office or a tax accountant.