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The story
An article highlighting experts’ warnings that the restaurant industry faces a “triple whammy” — the gap between the reduced consumption tax rate and the 10% rate on dining out, the unification of liquor tax rates for beer-type beverages, and chronic staff shortages — became a hot topic on 5ch’s News Express+ board. In the thread, some pointed out how low Japan’s consumption tax is compared to other countries, while others argued that even if the consumption tax were cut, restaurants’ profits wouldn’t change because the input tax credit would shrink accordingly — a claim countered by others insisting that the drop in the total amount paid would still work out as a net gain. This sparked a long, technical back-and-forth over the actual calculations. Views on the Ministry of Finance and the ruling and opposition parties’ handling of tax policy were also mixed in, making it a debate that went well beyond simple yes-or-no positions.
Expert commentary
Going forward, conditions surrounding the restaurant industry look set to get even tougher. One major concern is a consumption tax cut on food. If the tax rate on food is lowered, the price gap with supermarket and convenience-store bento boxes and prepared dishes will widen, likely pushing more people to eat out less.
The liquor tax reform can’t be ignored either. On top of price shifts from unifying the tax rate on beer-type beverages, rising prices and a thriftier mindset could accelerate a shift from drinking at izakayas to “drinking at home” instead, squeezing sales further.
Source: news.yahoo.co.jp / Original article here
What people said
Denmark: 25% (food 25%)
Norway: 25% (food 15%)
Finland: 24% (food 14%)
Japan: 10% (food 8%)
Japan's consumption tax is already low, so there's no need to cut it or abolish it.
Just abolish everything below the consumption tax — that's the only option.
Funding source: dismantle the tax office.
That alone would generate profit.
Even if input costs drop by the consumption tax amount, the deduction shrinks by that same amount, so nothing changes.
Found an idiot. Your actual tax bill goes up.
The price gap between supermarkets and convenience-store bento is already widening lol
Convenience stores are just using inflation as cover to jack up prices.
Packaged rice is getting the same opportunistic price hikes.
That was way rougher than this.
Small restaurants were riding a subsidy bubble back then ^^
Kinda want to go back to those days…
It's not exactly 'automatic,' but if markets read the tax cut as worsening government finances, the yen and bonds sell off, pushing input costs up even further.
Then the opposition should run on raising taxes as their campaign pledge.
They're raising rates because corporate conditions are good — your understanding is the one that's wrong lol
If that's really what you think, the opposition should just campaign on raising taxes.
If you're right, that's a change of government right there.
the Lost 30 Years are on them too.
No, the Lost 30 Years are Komeito's fault.
Now that they've split from the LDP, we should give the LDP a chance.
If Komeito ever teams up with them again, that's when we cut the LDP loose.
People assume 'a smaller deduction = a loss,' but the deduction is just a mechanism for getting back part of the consumption tax you paid, so:
Pay less consumption tax → of course the deduction shrinks too
But the drop in the amount paid is bigger than the drop in the deduction
The deduction is calculated based on the consumption tax you paid
Therefore:
Input price drops → the deduction shrinks too, but the drop in the amount paid is bigger, so it's always a net gain
The claim that 'it's meaningless because the deduction shrinks' is mathematically wrong.
It's not the input price that drops — it's the consumption tax on the input that drops. The deduction falls by that exact same amount, so it's meaningless.
> 'Input price drops → the deduction shrinks too, but the drop in the amount paid is bigger, so it's always a net gain'
The input price only drops because the consumption tax drops. In other words, the decrease in the amount paid and the decrease in the deduction are the same amount, so there's no profit from a consumption tax cut.
It's brutal for anyone who isn't a major chain.
There are just too many restaurants now.
Cheap-to-maintain food stalls would've been the right call all along.
Look, the consumption tax you pay on inputs gets deducted, so even if the input cost drops by the tax amount, the deduction shrinks by that same amount and your tax bill goes up accordingly. So why do you think that's a profit?
Just abolish the consumption tax itself already 😂😂😂😂😂
Back in the Showa era, when the Japanese economy was booming, there was no 'consumption tax' or 'export tax refund' to begin with 😂😂😂😂😂
The consumption tax is a system for having everyone — not just the working-age population — share the burden of social security costs, which already eat up more than half the national budget.
In other words, cutting the consumption tax just means dumping that heavy social security burden entirely onto working-age people.
If you're going to cut the consumption tax, you need to cut social security spending itself too, or the burden on working-age people won't actually get lighter.
Just raise corporate and income taxes instead 😠😠😠😠😠
And abolish the Children and Families Agency and the gender-equality programs 😠😠😠😠😠
Wasn't it the LDP's Motegi who basically threatened the Japanese public, saying pensions would have to be cut by 30% if the consumption tax were lowered 😠😠😠😠😠
Background and key points of this discussion
The liquor tax has been undergoing a phased unification of rates for beer-type beverages since October 2020, and October 2026 marks its final stage. As for the consumption tax, dining out remains at 10% while supermarket and convenience-store bento and prepared foods benefit from the reduced 8% rate — a gap widely cited as one reason people are eating out less. The thread’s biggest split was over whether a consumption tax cut would actually boost restaurant profits: the claim that ‘a lower tax on inputs just shrinks the deduction by the same amount, so there’s no real gain’ went head-to-head with the claim that ‘the drop in the total amount paid is bigger, making it a net gain.’ This disagreement stems from differing understandings of how the input tax credit works, and since which side is correct depends on the actual calculation method under the invoice system, it can’t be settled by the thread discussion alone. There was also relatively little background explanation about the liquor tax reform, and posters frequently wove in their own political leanings (views on the ruling/opposition parties and the Ministry of Finance), making it a topic where economic debate and political arguments easily got tangled together.
*This article is compiled as an excerpt and summary from the 5ch (News Express+) thread “The Background Behind the ‘Triple Whammy’ of ‘Consumption Tax Cuts,’ ‘Liquor Tax Reform,’ and ‘Staff Shortages’ Hitting Struggling Restaurants #ExpertTopic.”
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