What happens to restaurants if the consumption tax on food becomes 0%?

If the tax on dining out remains at 10%, there will likely be a shift in demand towards cheaper supermarket ready-to-eat meals and takeaways, making dine-in restaurants relatively less competitive.

What are examples of reduced tax rate implementations abroad?

When Spain reduced VAT on food to 0%, prices were almost fully passed on to consumers within about 2 months. In Germany, however, the pass-through rate was only about 70%.

What are the characteristics of the Japanese market?

As of 2020, single-person households accounted for 38.0% of all households. Due to factors like food inflation and aging, the benefits of tax relief tend to favor retail and bulk buying.

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What happens to restaurants if the food consumption tax is 0%? Explaining the impact on dining out, practical burdens, and measures to take now

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An analytical report explaining that reducing the food consumption tax to 0% will likely shift consumer demand away from restaurants and towards food retail and takeout, driven by domestic demographic changes and overseas case studies.

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Frequently Asked Questions

Q: What happens to restaurants if the consumption tax on food becomes 0%?: A: If the tax on dining out remains at 10%, there will likely be a shift in demand towards cheaper supermarket ready-to-eat meals and takeaways, making dine-in restaurants relatively less competitive.
Q: What are examples of reduced tax rate implementations abroad?: A: When Spain reduced VAT on food to 0%, prices were almost fully passed on to consumers within about 2 months. In Germany, however, the pass-through rate was only about 70%.
Q: What are the characteristics of the Japanese market?: A: As of 2020, single-person households accounted for 38.0% of all households. Due to factors like food inflation and aging, the benefits of tax relief tend to favor retail and bulk buying.