Japan to abolish tax discount for low-income workers

Japan’s government plans to abolish a lower tax rate that traditionally has been applied to a number of tobacco products popular among the elderly and low-income workers, according to a story in The Japan News.

The tax advantage will be phased out over several years from fiscal 2015.

Six brands owned by Japan Tobacco Inc, including Wakaba, attract only about half the level of taxes applied to other products.

Because these brands are popular among the elderly and low-income workers, their special tax treatment has been seen in the past as a social policy.

But consumption of the six brands has grown sharply since a tobacco tax hike in 2010, and purchases by people other than long-time users have been increasing, a health ministry official was quoted as saying.

The Liberal Democratic Party’s tax panel has given approval to the plan to abolish the concession to the elderly and the financially less well off, and the LDP and its coalition partner, Komeito, will include the abolition in a fiscal 2015 tax reform outline it aims to adopt on December 30.