JT's Position on Japan's Large Package of Tax Revisions for the FY2010

Source from:  Japan Tobacco inc. 01/28/2010

Japan Tobacco Inc. (JT) has learned that a tobacco excise increase of ￥3.5 per cigarette (and a price increase of approximately ￥5) has been decided today as part the Large Package of Tax Revisions for the Fiscal Year 2010. It is regrettable that the government has reached such a decision, as JT has strongly requested that a balanced and rational debate on the tobacco excise be conducted. Declines in the smoking rate and contraction of the tobacco market have already been accelerating in Japan, due to a declining and aging population, repeated tax hikes and the introduction of increasingly stringent regulations. The effects of such an unprecedented excise increase on consumers and the industry in this difficult environment is immeasurable. If an excise tax of such magnitude is implemented, JT will be forced to raise its product prices in increments beyond the amount of the excise increase. Prices for each of JT's brands will be determined taking into account the future of the market and the state of the economy. The Large Package of Tax Revisions also states that the government is aiming for the development of a new framework regarding future tobacco excise and the tobacco industry. JT requests that balanced and rational discussions from a broad spectrum of views be conducted by the government, taking into consideration that tobacco is consumed by a large number of adult smokers, as well as tobacco's contribution to public finance, and realities of the industry including retailers and leaf tobacco growers. JT will strive to continue providing high quality products to meet a wide range of consumer needs, and work with stakeholders in communicating the company's views regarding this ongoing issue. Enditem