Japan Tobacco looking to sell government's 50% stake as company seeks to go private to increase management freedom; company expresses opposition to possible rise in tobacco tax
September 7, 2011
– Japan Tobacco Inc. issued a statement Sept. 6 looking to sell the government’s portion of the company while voicing opposition to a possible tobacco tax increase, The Mainichi News reported Sept. 7.
JT wants to fully privatize to increase its management freedom, but the statement marks the first time the company has sought the move in writing.
The government currently has a 50% stake in JT, equal to 5 million shares, and would be able to take in around 1.7 trillion yen by selling all of its shares, JT said.
Elements within the ruling Democratic Party of Japan have called on the government to sell its shares in JT to bring in money to help rebuild the country after the devastating earthquake and tsunami March 11.
Japan’s Finance Minister Jun Azumi said Sept. 5 that the government might consider selling some its shares in JT, while also expressing willingness to sell its stake in subway operator Tokyo Metro Co. to help fund reconstruction.
JT said a move to raise tax on tobacco suggested by Health, Labor, and Welfare Minister Yoko Komiyama Sept. 5 would not create a sustainable tax revenue increase and would accelerate a decline in sales volume.
Komiyama called for a 100-yen annual increase in price on 20-cigarette packs to about 700 yen to discourage smoking and protect human health. The comments come as the Japanese government continues to be divided over whether to raise taxes to help fund reconstruction in the northeastern part of the country.
The government most recently raised the tobacco tax in October 2010 by 3.5 yen per cigarette as part of a price increase that sent a 20-cigarette pack of the popular brand Mild Seven to 410 yen from 300 yen.
The primary source of this article is The Mainichi News, Tokyo, Japan, on Sept. 7, 2011.