Staff writer The good news — at last — for Japan’s ailing state coffers spells bad news for Japan’s estimated 33.63 million smokers: The nation’s most powerful policymaker announced Wednesday that the ruling Liberal Democratic Party will consider raising the tax on cigarettes by 40 yen per pack, starting as early as next fiscal year. LDP policy chief Shizuka Kamei told reporters that he will have the party’s tax panel consider a tax hike of 2 yen per cigarette, which he says will increase revenue for local and national governments by some 500 billion yen. A pack usually contains 20 cigarettes. Currently, about 70 percent of the tax levied on tobacco products goes to local governments, the rest to the national government. But Kamei added that he will also ask the party’s tax panel to consider changing that ratio to increase income for the central government. The national government, which has implemented a series of huge pump-priming measures to prop up the economy over the past decade, is increasingly dependent on bond issues to fund its spending habits. The national government repeatedly turns to nicotine-lovers when it finds itself in financial difficulties. The tobacco tax was last raised in 1998 by 0.82 yen per cigarette to help settle a 3.8 trillion yen debt in a special national forestry budget and a 28 trillion yen debt left over from the liquidation of a national railway company. Government bond issues during the current fiscal year are expected to total 38.62 trillion yen, which will exceed the state’s net tax revenues — tax income minus grants to local governments — for the first time since the end of World War II. “Spending is rapidly increasing. (A tax hike) is not a good thing, but we have to consider it,” Kamei said. According to a survey by the Health and Welfare Ministry, 18 million of Japan’s 33.63 million smokers are unable to stop smoking, even though they want to kick the habit. Kamei doesn’t smoke. “I am not (proposing the idea) just because I’m a non-smoker,” said Kamei, who may be right to be concerned that the nation’s smokers will bear a grudge against him.
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