The tax panels of the ruling Liberal Democratic Party and its coalition partner, Komeito, basically agreed Monday to draw a line between dining out items and processed foods based on the food sanitation law when deciding what to exempt from the consumption tax hike to 10 percent from 8 percent in April 2017.
On Saturday, the LDP and Komeito agreed that the tax will be kept at 8 percent for fresh and processed foods and beverages as a relief measure after the 2-percentage-point tax hike. Meanwhile, eating out services were excluded from the list of items subject to the current tax rate.
The two parties therefore have been discussing how to handle cases such as one in which consumers buy processed foods at stores and eat them there, apparently keeping in mind convenience stores and others that have eat-in areas.
The food sanitation law regulates the sanitary management of restaurants and cafes that cook food.
Meanwhile, cooked foods sold at many convenience stores are only simply processed and are not regulated by the law. Because of this, these foods sold and eaten inside the stores will likely be eligible for the 8 percent consumption tax rate, without being categorized as dining out items, sources said.
But food deliveries and takeaway foods could be classified as dining out items, according to the sources.
The two parties’ tax panels also agreed to include national and local newspapers for which daily delivery systems have been established in the list of items that will continue to be covered by the current tax rate.
The LDP and Komeito aim to officially adopt their tax system reform package for fiscal 2016, which starts next April, as early as Wednesday.