JAPAN
Japan’s tobacco tax revenue is likely to drop by more than ¥50 billion (US$450 million) this year as more smokers switch to heat-not-burn products containing less tobacco.
Toshihiro Nagahama, an economist at Dai-ichi Life Research Institute, which conducted the study with Kyodo News, said that the fall is sure to prompt the government into reforming the tobacco tax system.
Nagahama’s prediction is based on an expected shift in demand from regular cigarettes to heat-not-burn tobaccos, as well as a decline in the number of smokers.
In Japan, the tax on a pack of conventional cigarettes is ¥244.90 However, the levy varies from ¥34.30 to ¥206.00 for heat-not-burn tobaccos, depending on the tobacco leaf content. Without increasing the tax for heated tobaccos, the decline in annual tax revenue could widen to ¥300 billion by 2020.“
The pace of heated tobaccos’ sales growth is very fast,” said Nagahama. “A tax system review is certain, considering the lower tax rates compared with other countries and the current state of national and local finances.”