Japan Mulls to Raise Tobacco Tax for Defense Concerns

Japanese authorities see increases in corporate taxes and excise taxes on tobacco products as major sources of increased defense spending.

In particular, corporate income taxes and tobacco excise taxes will be increased in stages starting around 2024. These fees now stand at 23.2% and 61.7%, respectively. The possibility of using some of the funds from the fees for the recovery of areas following the 2011 earthquake and tsunami is also being considered.

The Japanese government expects to receive an additional 1.1-1.2 trillion yen (about 8.05-8.78 billion USD) in this way. Up to 70 percent of this amount is planned to be provided through an increase in corporate taxes.

The government and the ruling party are facing difficulties in coordinating a tax increase of less than 1 trillion yen due to the increase in defense spending.

Fuji TV political correspondent Koki Kadowaki will relay the update from the Diet press room. A senior government official said, "The prime minister is determined to increase the defense budget." Economy and Security Minister Takashi expressed his dissatisfaction on Twitter, "I can't understand the Prime Minister's real intention of making statements to cool down the pay raise mentality at this time."

In addition, voices within the party are spreading, saying that "the order of raising taxes before explaining the details of defense capabilities is wrong." Chief Cabinet Secretary Matsuno said, "I am aware of Minister Takashi's statements on social media. We have had various exchanges with the cabinet ministers, but I don't want to answer." In addition, the government is considering raising the tax rate on products such as “heat not burn cigarettes" and gradually increasing the tax from 2024, and is also considering measures to reduce the burden on small and medium-sized enterprises.

There is deep-rooted opposition to tax increases within the party, making coordination difficult. The government and the ruling party are facing difficulties in coordinating tax increases due to the increase in defense spending, which is less than 1 trillion yen. Fuji TV's political correspondent Kouki Monowaki will be reporting on the latest situation from the Diet chamber.

A senior government official said, "The prime minister is determined to increase the defense budget. " Economy and Security Minister Takashi expressed his dissatisfaction on Twitter, "I can't understand the real intention of the prime minister to make a statement to cool down the mindset of the pay rise at this time." There were also voices within the party saying, "It is unconscionable to increase taxes before explaining what the defense capabilities are." Chief Cabinet Secretary Matsuno said, "I am aware of Minister Takashi's statements on social media. We have had various exchanges with the cabinet ministers, but I don't want to answer."

In addition, the government is considering raising the tax rate on items such as "heated, non-burning cigarettes" and gradually raising the tax from 2024, and is also considering measures to reduce the burden on small and medium-sized enterprises. There is deep-rooted opposition to tax increases within the party, and coordination is difficult.