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Market Chatter: Japan Farm Incomes Seen Falling 300 Yen Billion Under Proposed Consumption Tax Cut

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A think tank warned that Japan's proposed 1% consumption tax on food could cut 800,000 small farms' annual income by over 300 billion yen, Nikkei Asia reported Monday.

The average loss per farm would be about 400,000 yen, with the impact varying by size, according to Mitsubishi Research Institute, said the publication.

Many of these farms are currently partially or fully exempt from remitting the 8% tax they collect on sales, so a rate cut would reduce their income rather than provide relief, the news daily said.

The government, which is considering implementing the reduction from April 2027, plans to offer subsidies and financial support to affected farmers, the report said.

The concern is that lower incomes could accelerate the trend of farmers leaving the industry altogether, it added.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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