The government plans to make purchases of daily necessities such as food and beverages eligible for a previously announced rebate program that is intended to bolster demand after the consumption tax is increased to 10 percent next year, sources said Friday.
The program, which is in addition to an already announced move to keep the tax rate at 8 percent for daily goods, provides incentives for credit card companies to offer reward points worth 2 percent of the purchase price for products bought at small- and medium-size retailers, restaurants and hotels. The plan, which will also cover payments made with other cashless methods, will essentially make it possible for consumers to buy necessities at a 6 percent tax rate.
Prime Minister Shinzo Abe announced earlier this week that the government will go ahead as planned with raising the consumption tax from the current 8 percent to 10 percent in October 2019, but the tax rate on items such as food, nonalcoholic beverages and newspapers will remain at 8 percent.