At a meeting by the ruling Liberal Democratic Party's Tax System Research Commission on Thursday, Chairman Yuji Tsushima said his panel does not plan to include a tobacco tax hike in its outline for the tax system refom of fiscal 2009. New Komeito, the LDP's junior coalition partner, is also wary of a tax increase.
Prime Minister Taro Aso had initially planned to ask senior commission officials to agree to a tax hike. However since LDP administrations have in principle followed the decisions of the party's tax panel, sources said that Aso is expected to let the decision stand.
The government had been considering an increase in tobacco taxes by JPY 40 to 60 (EUR 0.33 to 0.50) a pack in order to fund higher costs of the social security scheme, which are caused by an ageing population. (pi)