The head of a suprapartisan council on social security has presented an interim draft on a proposed cut in the consumption tax rate for food as a measure to help cushion the impact of inflation as well as related measures.

The draft, unveiled Wednesday by Itsunori Onodera, chief of the ruling Liberal Democratic Party¡¯s Research Commission on the Tax System, calls for reducing the tax rate to 1% for food for two years starting April 2027.

In addition, a finely tailored cash benefit program that is linked to income levels and is equivalent to the amount of revenue from a 1% consumption tax rate for food will be introduced in fiscal 2027 in order to effectively reduce the tax rate to zero for food items, according to the draft.

Furthermore, it calls for a study on measures to support eating and drinking establishments that are expected to suffer adverse impacts from the tax cut.

The council aims to formalize the series of measures within this month after forging a consensus between the ruling and opposition sides. A final decision will be made by Prime Minister Sanae Takaichi.

At the next meeting, members of the council are slated to discuss how to secure financial resources for the tax reduction and the benefit program.

¡°Gaps between parties remain quite large,¡± Onodera told reporters after the Wednesday meeting, adding, ¡°It would be difficult to obtain consent in a certain direction at the next meeting.¡±

The benefit program, for which about ?600 billion in financial resources, equivalent to revenue from a 1% consumption tax rate for food, is expected to be secured annually, will cover low- and middle-income earners, with additional benefits planned to be offered depending on the number of children age up to 15.

The full-scale introduction of benefits is planned for fiscal 2029, targeting individuals who have a certain amount of earned income and pay taxes and social insurance premiums. The full-fledged measure will be aimed at promoting employment and increasing take-home pay through reductions in social security burdens.

The maximum age of children subject to the additional benefits will be raised to 18 while certain exceptions are planned for those with high-income spouses.

Takaichi, also leader of the LDP, vowed to reduce the consumption tax rate to zero for food in her campaigning for the Feb. 8 general election for the House of Representatives, the all-important lower chamber of parliament.

But her administration is opting to cut the rate to 1%, instead of zero percent, putting priority on early implementation. Preparations, such as updating cash registers, are expected to take about six months for a reduction to 1%, shorter than the period necessary for a cut to...