Daily Management Review

Japan may raise tobacco tax


According to NHK television, Japan's government may increase taxes on tobacco products and e-cigarettes to cover the budget gap required to increase defense spending to 2 percent of GDP by 2027 and to use a portion of the proceeds from the reconstruction tax enacted to aid in the nation's recovery from the 2011 earthquake and tsunami.

Langlebigkeit Manie
Langlebigkeit Manie
By 2027, Japan wants to raise defense spending to 2% of GDP. That comes to around 81 billion dollars or 11 trillion yen. In the current fiscal year 2022, military spending amounted to 5.4 trillion yen ($40 billion), or roughly 1.24% of GDP. According to analysts, in order to reach that goal by 2027 Japan would need to raise an additional 4 trillion yen (about $29.6 billion) every year, of which 1 trillion ($7.4 billion) is nowhere to be found.

The government is considering raising corporate taxes to be receiving 70–80 billion yen ($518–592.6 million) annually, taxing tobacco products, particularly electronic cigarettes, which are currently taxed less than "paper" cigarettes, to raise another 20–30 billion yen ($148 million), and redistributing funds for reconstruction to raise a total of 70–80 billion yen ($518–592.6 million).

The Defense Ministry of Japan intends to ask for 5.595 trillion yen (about $41.4 billion) in funding for the upcoming fiscal year (April 1, 2023 to March 31, 2024), which would be a record-high amount. Additionally, the amount is not final; it only represents the expenses that the Defense Ministry is willing to make public in particular contexts. As a result, experts and the media predict that total defense spending for the upcoming fiscal year would be close to 6.5 trillion yen (about $48 billion).

source: www3.nhk.or.jp