The Cabinet led by Prime Minister Yukio Hatoyama adopted on Tuesday a set of tax reforms for fiscal 2010 that would increase the burden on taxpayers by a total of around ¥980 billion a year.
The plan has the government maintaining the current gasoline tax rate, abolishing deductions for families with young dependents and raising the tobacco tax.
The tobacco tax hike — ¥3.5 per cigarette — is expected to raise the retail price of a pack of cigarettes by ¥100. The government estimates this will bring in an additional ¥120 billion a year.