Japan betting on the weak will power of nicotine addicts
The Japanese government is banking on the overwhelming power exerted by nicotine over spineless smokers in its search for new tax revenues.
A report by the Ministry of Health, Labor and Welfare says that the government can expect to earn an additional 9 trillion yen in tax revenue over the next 10 years by raising the price of cigarettes to 1,000 yen a pack.
“Many people won’t be able to give up, even if they want to, so raising the price will lead to an increase in tax income,” said a representative of the ministry’s research team.
The ministry carried out a survey of over 20,000 smokers on the Internet, with results showing that if prices were increased from 300 to 1,000 yen a pack, 96 percent would try and give up smoking. However, a previous survey by the Central Social Insurance and Medical Council revealed that even with the best medical treatment, the success rate of giving up smoking for a year is only 33 percent. So even accounting for those who can cut down, and demand dropping to 36 percent of the previous year, the research team still predicts a net tax revenue increase of 560 billion yen in the first year. In the next year, when many ex-smokers take up the habit again, demand would bounce back by 40-49 percent, with an extra 1.27 trillion yen a year going into government coffers.
The currently-planned price increase to 500 yen is predicted to make an extra 4 trillion yen in tax over the next 10 years.
At least (based on the article) government officials are honest about it and have apparently chosen not to sell the tax as a policy tool to encourage smokers to quit.
September 19th, 2008 at 12:16 amThe Australian Govt also slap high taxes on cigarettes, plus there’s also pressure from politicians and various anti-smoking lobbies to continually increase the tax. The idea being to tax it out of existence. Personally I think it’s a good thing. This approach has also been applauded by the WHO.
September 19th, 2008 at 9:22 amThis is also the trend in the US. It would definitely suck to be a smoker (for the monetary and health reasons).
September 19th, 2008 at 10:38 amWhen I first visited Japan in 1995, you could still smoke in offices (which stopped in America). Smoking in Japan is still relatively easier than in the USA but it is generally frowned upon. I was a light smoker and quit earlier this year (due to rising taxes, I refuse to pay). The funny thing is, tax revenue has dropped off so our state government is bemoaning the loss of tax revenue, which is the reason they have raised taxes in the first place? Hypocrites? Certainly! Politicians lie to us? Sure thing!
September 19th, 2008 at 9:52 pm