British American Tobacco Japan Ltd. is demanding a higher tax on cigarettes as part of Japan’s fiscal 2022 tax system reform, it was learned Thursday.
The company has submitted the request in writing to a group of lawmakers of the ruling Liberal Democratic Party, informed sources said.
The unusual move by a tobacco-maker comes as Japan is slated to raise its tobacco tax only for heat-not-burn tobacco products in October 2022, which is expected to make some of such products more expensive than cigarettes.
British American Tobacco Japan is concerned that this would work negatively for its strategy of shifting its focus from cigarettes to heat-not-burn products.
The company is also requesting that the tax on heat-not-burn tobacco be increased at a slower pace than that for cigarettes in the medium to long run.
The Japanese arm of British American Tobacco sells cigarettes under Kent and other brands, as well as glo heat-not-burn devices.
In its fiscal 2018 tax system reform, the government decided to increase the cigarette tax by ¥1 per cigarette each in 2018, 2020 and 2021 and the tax on heat-not-burn products in five stages from 2018 to 2022.
According to the Tobacco Institute of Japan, sales of cigarettes in fiscal 2020, which ended last March, dropped 11.8% from the previous year to ¥2.47 trillion, apparently due in part to a fall in opportunities to smoke outside home as people stayed at home amid the coronavirus pandemic.
Meanwhile, its first survey on sales of heat-not-burn products showed the sales came to ¥1.06 trillion, over 40% of the cigarette sales.
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