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[Taxation] Proposal to continue the value-added tax (VAT) reduction policy in the first half of 2025
2024/11/29
The Ministry of Finance plans to submit a proposal to the Diet to continue applying an 8% VAT rate to goods and services currently subject to tax reduction measures during the first half of 2025 (January 1 to June 30).
In addition, the ministry’s proposal includes a 2% reduction in the VAT rate from the current 10% to 8% for goods and services currently subject to the 10% rate. However, the following goods and services will not be eligible for the tax reduction.
＜Goods and services not eligible for tax reduction＞
Telecommunications, information technology, financial and monetary activities, banking, securities, insurance, real estate, metals, metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products, alcohol, tobacco, and other goods and services subject to special consumption tax
The above is currently at the proposal stage with the Ministry of Finance and is expected to be formally announced after deliberation in the Diet. If this proposal is approved, it is anticipated to bring economic benefits to many businesses and consumers. We will provide updates as information becomes available through future legal news updates.
