Japan Tobacco Inc. (JT) has applied to the Minister of Finance for approval to amend retail prices of six products including Wakaba and Echo of the former third class cigarettes, which would become effective on April 1, 2017, subject to approval by the Minster of Finance.
Following the revision of the tobacco tax law under the FY2015 tax reform, the preferential tax treatment for former third class cigarettes was abolished as of April 2016, and the tax rate for the cigarettes will be increased in stages until April 1, 2019. As the tax for the cigarettes will be raised by ¥1 per stick on April 1, 2017, based on the revision, JT decided to apply to amend the retail prices of the cigarettes. Retail prices that the company has proposed in this application reflect the amount of the tax rate increase as well as expected impact on demand.
JT plans to amend retail prices of all six former third class cigarettes in stages each time the scheduled tax rate hike is conducted. Retail prices of the cigarettes will be considered carefully, taking the market situation into account.