Japan may exempt food, drinks from sales tax hike

Japan may exempt some food and beverages from a planned increase in the sales tax, government sources said.

Prime Minister Shinzo Abe's government plans to raise the nationwide sales tax to 10 percent in 2017 from 8 percent currently to pay for rising healthcare costs, but many politicians worry about the impact on low-income households.

The government will use a national identity number system it plans to introduce for tax and social security to administer tax rebates on purchases of some food and drinks, the sources said.

The number system is similar to a social security number in the United States. The finance ministry could submit its proposal on the tax rebate as early as next week, the sources said.

An official from the ministry was not immediately available for comment.