On August 19, Sankei News reported growing concerns within the Japanese tobacco industry regarding the government’s plans to increase the tax rate on heated tobacco products. This proposal comes as Japan marks the 10th anniversary of the introduction of heated tobacco, a product that has become increasingly popular as a less harmful alternative to traditional cigarettes.
Current State of Heated Tobacco in Japan
Market Growth and Popularity
Since its launch by Philip Morris Japan (PMJ) in 2014, heated tobacco has rapidly gained traction in Japan, capturing about 40% of the tobacco market by 2023. The popularity of these products stems from their positioning as a reduced-harm alternative to traditional cigarettes, offering smokers a potentially less harmful option.
Current Taxation on Heated Tobacco
Currently, the tax rate on heated tobacco in Japan is 30% lower than that of traditional cigarettes. This tax advantage has contributed to the growth of the heated tobacco market by making these products more affordable for consumers. However, the Japanese government considered increasing this tax rate in 2023 to align it with that of traditional cigarettes, a move that was ultimately postponed.
Proposed Tax Increase and Industry Concerns
Purpose of the Tax Hike
The Japanese government is considering a tax increase on heated tobacco to raise funds for the national defense budget. However, this proposal has raised alarms within the tobacco industry, as it could eliminate the price advantage that has driven the adoption of heated tobacco products.
Impact on the Market and Consumer Behavior
If the tax rate on heated tobacco is increased to match that of traditional cigarettes, the cost of these products would rise, potentially discouraging consumers from switching to this lower-risk alternative. The industry fears that this could slow the transition away from traditional smoking and undermine public health goals.
Industry Advocacy for Reduced-Harm Alternatives
Calls for Regulatory Support
Cecilia Siu, PMJ’s Communications Director, emphasized the potential of heated tobacco to replace traditional cigarettes entirely within the next 15 years, contributing to a smoke-free future. She urged the Japanese government to support the transition to reduced-harm alternatives rather than implementing tax policies that could hinder this shift.
Health Research on Heated Tobacco
Research conducted by PMJ and other related institutions suggests that harmful substances in heated tobacco are reduced by 90% to 95% compared to cigarettes. Additionally, a 2017 clinical trial by Japan Tobacco (JT) found that the level of harmful substances absorbed by users of heated tobacco was comparable to that of non-smokers.
These findings have bolstered the industry’s argument for maintaining favorable tax conditions for heated tobacco products to encourage smokers to switch to these less harmful alternatives.
Tax Incentives in Western Countries
Some Western countries have already adopted a “harm reduction” philosophy, offering tax incentives for products like heated tobacco to encourage smokers to switch from traditional cigarettes. This approach is based on the idea that reducing the harm associated with smoking, even if not eliminating it entirely, can lead to significant public health benefits.
Challenges and the Need for Further Research
Concerns Over Long-Term Health Impact
Despite the potential benefits of heated tobacco, there are concerns about the lack of long-term clinical data on its health effects, particularly regarding secondhand smoke. This uncertainty has led some experts to advocate for more research to fully understand the risks and benefits of heated tobacco products.
Expert Opinions on the Tax Increase
Akira Oshima, a special researcher at the Osaka International Cancer Institute, believes that under the current policy framework, a tax increase on heated tobacco is inevitable. However, he also calls for accelerated research into the relationship between heated tobacco and health, emphasizing the need for a clearer understanding of the product’s long-term impact.
The proposed tax increase on heated tobacco products in Japan has sparked significant debate within the industry and among public health experts. While the government aims to raise funds for the national defense budget, the potential impact on the market and public health is a cause for concern. As Japan navigates this complex issue, the balance between fiscal policy and harm reduction will be crucial in shaping the future of tobacco control in the country.
FAQs
Why is the Japanese government considering a tax increase on heated tobacco?
The government is considering a tax increase on heated tobacco products to raise funds for the national defense budget. This move would align the tax rate on heated tobacco with that of traditional cigarettes.
What impact could the tax increase have on the heated tobacco market?
The tax increase could eliminate the price advantage of heated tobacco products, potentially discouraging consumers from switching to these less harmful alternatives and slowing the transition away from traditional smoking.
What is the industry’s position on the proposed tax hike?
The industry is concerned that the tax increase could hinder the adoption of heated tobacco products and is advocating for regulatory support to encourage smokers to switch to these reduced-harm alternatives.
What research has been conducted on the health impact of heated tobacco?
Research by PMJ and Japan Tobacco suggests that heated tobacco products contain 90% to 95% fewer harmful substances than traditional cigarettes. However, concerns remain about the lack of long-term clinical data on the health effects of heated tobacco, particularly in terms of secondhand smoke.
Are other countries promoting the use of heated tobacco?
Yes, some Western countries have adopted a “harm reduction” approach, offering tax incentives for heated tobacco products to encourage smokers to switch from traditional cigarettes.
What are the next steps in the debate over heated tobacco taxation in Japan?
The Japanese government will need to weigh the potential public health benefits of heated tobacco against the fiscal need to increase tax revenue. Further research into the long-term health effects of heated tobacco may also play a role in shaping future policy decisions.
