More Support For Proposed Japanese Tobacco Tax Hike

by Mary Swire, Tax-News.com, Hong Kong

22 November 2001

Following revelations last week from the Japanese Finance Minister, Masajuro Shiokawa, that an increase in tobacco tax could be on the cards for the next financial year, the country's Health, Labor, and Welfare Minister, Chikara Sakaguchi has announced his support for the proposed measure.

Speaking on Friday, the Finance Minister said that although there were no immediate plans for tax increases, in the event that such measures become necessary in order to raise additional revenue, an increase in the tax on cigarettes is the obvious candidate. 'There is a movement towards discouraging smoking so I don't think the public will be opposed to a tax hike on cigarettes,' he said at the time.

However, Mr Sakaguchi is more positively enthusiastic about the proposed measure: 'I think it's a great idea,' he told a press conference on Tuesday. 'It would put some burden on smokers, but it makes good sense if it were used to promote people's health. I'm for it.'

There have been suggestions that the additional revenue from the tobacco tax could be used to help cover patients' medical expenses. However, the Health Minister added that planned reforms of the Japanese medical system should take priority over the imposition of any new taxes. 'To walk around and look only for sources of revenue is undesirable before eliminating useless part of the current medical system,' he explained.

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