The tobacco industry generates the Japanese government about $19 billion per year in taxes, practically 3 % of the government’s entire earnings.
Tax on cigarettes have been increased. However cigarettes prices in Japan are around half those in other developed countries. Laws that demand buildings to costly, special smoking areas have pushed numerous buildings to disallow cigarette use.
The new government chosen in 2013 is thinking about increasing the tobacco tax. In December 2013 there were debates regarding the increase of the tobacco tax, even boosting it so high that the price of package of cigarettes would triple to around $10 per package in order to help finance social security and increase government fund through the economic crisis but in the end the idea to increase taxes was snuffed out due to resistance from cigarette industry organizations and lawmakers who depend on the industry for votes.
Tobacco is cultivated in Japan. The number of tobacco growers has dropped from about 44,000 in 1989 to about 12,000 in 2008, with the majority of them in Tohuko and Kyushu. The interests of Japan’s 12,000 tobacco growers has usually been one of the government’s justifications for not cracking down more on cigarette use.
In September 2011, Kyodo, revealed that practically 40 % of leaf tobacco farmers in Japan plan to stop cultivation in or after 2013, reacting to a latest call from Japan Tobacco for volunteers to stop cultivation despite decreasing tobacco sales. Japan Tobacco Growers Association surveyed approximately 10,650 tobacco growers farming 13,930 hectares via its 21 member associations throughout Japan, discovering that 4,106, or about 38.6 %, intend to quit cultivation, it reported. The 4,106 growers merged cultivate nowadays about 4,412 hectares, equal to over 30 % of the entire area under cultivation. Slipping tobacco sales encouraged Japan Tobacco to ask tobacco growers willing to end farming, as it is legally responsible to purchase all tobacco leaves from local growers.