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The story
Even as the government moves to cut the consumption tax on food to 1%, it is reportedly also coordinating a plan to offset the resulting lost revenue for small and micro-scale farming operations through subsidy payments tied to sales volume. On 5ch’s Newsflash+ (News Speed+) thread, arguments flared over the mechanics of tax-exempt and simplified-taxation businesses — with posters asking “why do only farmers get special treatment?” — alongside debate over how to fund a scheme estimated to cost several trillion yen.
On the 25th, the government began coordinating a plan to pay a fixed amount in subsidies to support small and micro-scale farming and fishing operations that stand to lose revenue from cutting the consumption tax on food and beverages to 1%. The scheme envisions offsetting the lost revenue based on the scale of each business’s sales, cushioning the blow to their operations. Details of the program and the payment amounts will be worked out during the compilation of the draft FY2027 budget, with a final decision by the end of 2026.
The government has presented an outline of the support plan to the Liberal Democratic Party (LDP). The goal is to ease the anxiety of businesses affected by the tax cut and ensure a smooth rollout of the reduced rate starting in April 2027.
Small-scale operators make up the vast majority of Japan’s agriculture and fisheries sector. Under the current system, businesses are exempt from remitting all or part of the consumption tax they collect on sales, and can keep that money as income instead. Businesses with annual sales of ¥10 million or less are fully exempt (“tax-exempt businesses”), while those with sales up to ¥50 million are partially exempt (“simplified-taxation businesses”).
Source: 47news.jp / Read the original article here
What people said
Because they're the LDP's voting base.
Isn't the consumption tax something consumers pay, with businesses just collecting it and passing it on to the government?
If the consumption tax goes down and prices drop, sales volume should basically go up, right?
So shouldn't businesses end up making MORE money?
It's shown that way on receipts, but structurally it was never actually set up as businesses collecting it as an agent on the government's behalf.
Micro-businesses were allowed to just pocket the consumption tax under the old rules. The invoice system was brought in specifically to shut that down.
It's recognized just fine.
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 scrap it.
This whole "windfall tax" setup, where you get to just keep the consumption tax, was cooked up by the idiot crooks at the old Ministry of Finance.
Since it's a system the big senpai rigged up, nobody gets to complain about it now.
These are crooks who force-split their operations into multiple companies, each kept under ¥10 million in sales, just so they can dodge the consumption tax and pocket it themselves.
Farmers are citizens too, you know?
Rice prices really should have risen in line with overseas inflation, which would have raised farmers' incomes.
The reason Japanese real wages aren't rising (why farmers' sales aren't growing) is that more and more people are relying on social security to live.
When you hand money to people like pensioners or welfare recipients — people whose income doesn't grow through economic activity — they try to stretch that money as far as it goes, so they buy the cheapest goods they can find.
Trading companies chasing that demand then import cheaper substitutes from third countries, and Japan's market fills up with cheaper goods.
Domestic-demand manufacturers respond to rising import costs for raw materials by holding down employee wages, just to meet the demand from people dependent on welfare.
For Japan to raise real wages, there's no way around it: cut pensions and welfare benefits for people under 80, and put to work the people who are healthy enough — thanks to longer healthy life expectancy — but choose not to.
Politicians are cooking up slush funds, and citizens are running subsidy fraud.
That's Japan's "national character" for you, lol
Or solve it with individual compensation schemes.
Cutting taxes during inflation is the dumbest of dumb policies.
It'll accelerate inflation.
An "inflation tax" is scary stuff.
Tax cut + 1% subsidy: roughly ¥5 trillion
Making up the shortfall in local consumption tax: ¥1.6 trillion
Subsidies for restaurants dealing with different tax rates for eat-in vs. takeout: undecided — maybe several trillion yen?
Compensation for non-invoice-registered farmers and sole proprietors with ¥10 million in taxable sales: undecided — maybe several trillion yen too?
And the Takaichi administration says it won't issue deficit bonds for this?
No way that adds up.
Then just skip the consumption tax cut entirely — whatever happened to the cost-of-living countermeasures?
Being a lawmaker is basically just being the cheerleader-in-chief for a pack of freeloaders anyway.
The restaurant industry and others are going to keep filing requests one after another, and I bet the payouts keep coming.
Just like the COVID subsidy gold rush, it'll turn into a world where whoever pushes hardest wins.
And the public foots the bill.
They campaigned on expansionary fiscal policy (old-school Keynesian handouts, basically) in the first place — of course they're not actually going to do anything about the cost of living.
Either they don't understand that expansionary fiscal policy is an anti-deflation measure (i.e., a policy that accelerates price rises), or they're counting on the public not understanding it…
Well, they're pushing expansionary fiscal policy (anti-deflation), tax cuts (anti-deflation), and continued monetary easing (anti-deflation) all at once — they must figure the public is dumb enough to be talked into backing a total U-turn.
It'd be better to consolidate small farmers' fields into large-scale operations.
The Abe administration aimed for large-scale corporatization of farming, but local agricultural committees teamed up with the Communist Party and put out statements opposing it, remember?
Japan's agriculture problem is that cultivated land per farmer is too small. But you can't buy or sell farmland without approval from the local agricultural committee.
I'd say the real problem with Japanese agriculture isn't JA (the farmers' co-op) — it's the agricultural committee system.
Sole proprietors get the exact same treatment if they're not invoice-registered either — it's the so-called "windfall tax" problem.
The invoice system was introduced specifically to fix that windfall-tax problem, you know.
Are you okay in the head?
You clearly don't understand the difference between a sales tax and a value-added tax.
What's the actual POINT of this tax cut????
Because a lot of people are struggling to get by. Otherwise why would they cut taxes? You don't get that much?
Is a two-year tax cut really going to fix things for people who are struggling? Is this something that gets sorted out in just two years?
If you cut taxes while inflation is running, it'll accelerate inflation and make life even harder on the poor.
Meanwhile, people who already hold assets just watch their asset values rise with inflation.
You've been played, man.
Cutting the consumption tax isn't the problem — if they're going to cut it, they should just raise the corporate tax to cover it.
Every single time they've raised the consumption tax up to now, they've paired it with a corporate tax cut, lol
Don't tell me you're one of the suckers who actually believed Abe's line that the consumption tax funds social security?
Then income tax should go back to what it used to be too.
The consumption tax was originally introduced to shift the ratio of direct to indirect taxes, and income tax was lowered alongside it. The bottom income tax bracket needs to go back to 10% (excluding resident tax).
Also, Japan's corporate tax hasn't actually come down as much as people claim — that's exactly why, until fairly recently, Japan's effective corporate tax rate was the second-highest in the world.
Background and Key Points
For readers unfamiliar with Japanese tax administration: businesses under ¥10 million in annual sales are “tax-exempt” and never have to remit the consumption tax they collect, while those under ¥50 million can use “simplified taxation,” paying a fixed deemed rate rather than reconciling actual input costs. Either way, a share of what customers pay at checkout stays with the business as extra income — a quirk widely called “eki-zei” (windfall tax). Japan’s October 2023 invoice system was designed specifically to close this loophole for ordinary sole proprietors by denying tax credits to non-registered vendors, but small farmers and fishers remain heavily untouched by it, which is why they’re singled out now for a compensation scheme as the food tax rate drops to 1% in April 2027.
The thread’s real fault line wasn’t over farmers getting money per se, but over the premise itself: several posters assumed the consumption tax is purely pass-through, so a rate cut should only raise sales volume and profit, never cause “lost revenue.” Others countered that the loss is specifically the shrinking eki-zei margin these operators currently pocket — a distinction the article’s framing glosses over.
What’s easy to miss is that this isn’t really an agriculture story so much as a tax-loophole story: the same windfall exists for any small non-invoice-registered sole proprietor, and posters noted the invoice reform already stripped that protection from everyone else. The thread also flagged, without resolving, how a multi-trillion-yen subsidy scheme squares with the government’s simultaneous pledge to avoid new deficit bonds.
*This article is compiled from excerpts and a summary of the 5ch (Newsflash+) thread “Consumption Tax Cut: Subsidies for Small Farmers, Offsetting Lost Revenue Based on Sales.”
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