A tax hike on cigarettes is being considered as part of tax reforms for fiscal 2003, Chief Cabinet Secretary Yasuo Fukuda said Thursday.

“We can say an increase in tobacco tax is an issue to be studied,” Fukuda said. “We have to make a final decision after listening to various opinions.”

The Tax System Research Commission of the Liberal Democratic Party will discuss the possibility of a tobacco tax hike in ongoing debates, Fukuda said.

On Wednesday, Takenori Kanzaki, one of Prime Minister Junichiro Koizumi’s allies in the ruling coalition, said the tobacco tax “can be raised” if its effects on people’s health and comparative rates overseas are considered. Kanzaki heads New Komeito, the LDP’s largest partner in the tripartite coalition.

No sales tax hike

Prime Minister Junichiro Koizumi reiterated Thursday that his administration has no plans to raise the 5 percent consumption tax.

“I welcome (various) discussions (about the consumption tax), but I won’t raise the rate during my tenure,” he told reporters at his office.

His remarks came after the governmental Tax Commission last week proposed reform plans that include increasing the number of businesses that are required to hand over the consumption tax paid by consumers.

At present, small businesses with taxable sales of less than 30 million yen a year are free of consumption tax payments and businesses with annual sales of less than 200 million yen are eligible to pay the tax under a simplified calculation method.

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