Lower tax take

Japan’s tobacco tax revenue is likely to drop by more than ¥50 billion ($458 million) in 2017, according to a study conducted by Kyodo News in conjunction with Toshihiro Nagahama, an economist at Dai-ichi Life Research Institute.

The study attributes the reduction to a decline in smoking prevalence as well as an increase in the number of smokers switching to heat-not-burn (HNB) products.

Japan taxes cigarettes at ¥244.90 per pack, while the tax on HNB products ranges from ¥34.30 to ¥206, depending on the tobacco content.

Without an increase in the tax on HNB products, the decline in annual tobacco tax revenue could widen to ¥300 billion by 2020, according to the estimate.

The market for HNB products is growing rapidly and thus a tax review is certain, said Nagahama.

Japan Tobacco expects domestic cigarette sales to shrink 13 percent this year largely due to a rise in demand for HNB products.