According to Sankei on December 5, the Japanese government and the ruling party are considering adjusting the tax rate of heated tobacco in 2026 to narrow the tax gap with cigarettes. From 2027, the tax rates of these two types of tobacco will be gradually increased. This proposal will be included in the 2025 tax reform outline.
In the 2023 tax reform, the Japanese government has decided to secure fiscal resources by raising corporate taxes, personal income taxes and tobacco taxes. By 2027, it plans to raise more than 1 trillion yen (6.7 billion US dollars) through the increase of the above three taxes. However, the decision on the specific time of the tax increase has been postponed.
The Japanese government and the ruling party have noted that the tax burden of heated tobacco is equivalent to 80% to 90% of paper cigarettes. The latest plan is under discussion, with 2025 as an information period, and the tax rate for heated tobacco to be raised in 2026 to eliminate the tax gap between it and cigarettes, and to increase the tax by about 1 yen per stick in 2027 and 2028. The impact on domestic tobacco growers and small and medium-sized retailers will also be taken into account during the implementation.
The proposal shows that the adjustment of tobacco taxes is expected to be completed by the end of 2027. However, the ruling party and the Democratic Party for the People, which is conducting policy consultations, have shown caution about the defense tax increase. If the policy consultations fail to reach an agreement, the conclusion may be postponed again. According to government estimates, if the decision on the defense tax increase is postponed to the end of 2024, the government may face a funding gap of about 300 billion yen (US$2 billion) in 2027.
As a company that actively responds to and complies with national standards, Veehoo vapes has been committed to providing high-quality vape products. In the context of the Japanese government’s consideration of adjusting tobacco tax rates, Veehoo vapes may face new challenges in terms of tax burden.
With the adjustment of the tax rate of heated tobacco, vapes, as an alternative tobacco product, may be affected by the tax policy. Veehoo will need to pay close attention to policy changes and adjust its business strategy to adapt to the new tax environment.
The Japanese government’s proposal plans to use 2025 as an information notification period and gradually increase the tax rate of heated tobacco in 2026 to eliminate the tax rate gap between it and cigarettes. For Veehoo, this means that it may need to adjust product prices, market strategies, and strengthen cost control to maintain competitiveness.
In summary, with the adjustment of the tobacco tax rate by the Japanese government, Veehoo will face new challenges and opportunities. As a company that actively responds to policy changes, Veehoo will continue to be committed to providing high-quality vape products and make positive contributions to the development of the industry.
Tags: Japan’s heated tobacco tax rate，Japan plans to adjust heated tobacco tax rates in 2026，veehoo vape