JTI CFO: Japan Heated Tobacco Tax Reform May Weigh on Growth This Year
According to Japan Tobacco International CFO Vassilis Vovos, Japan’s upcoming tax policy to remove preferential treatment for heated tobacco products is expected to pressure the company’s growth this year. The adjustment will align heated tobacco tax rate
According to JTI CFO Vassilis Vovos, Japan’s upcoming tax reform ending preferential tax treatment for heated tobacco products is expected to put pressure on the company’s growth this year. The policy change will bring the tax rate on heated tobacco products in line with that of conventional cigarettes, and the retail price (including sales tax) of each pack of heated tobacco sticks is expected to rise by JPY 70 to 100 (about $0.46 to $0.65). Vovos said the company plans to gradually raise prices in 2026 to offset the impact of the new policy and avoid a sharp one-time increase.
According to Reuters, the tax policy change poses a challenge to Japan Tobacco International’s expansion of its heated tobacco product Ploom in the Japanese market. Japan is the world’s largest heated tobacco market and is currently dominated by rival Philip Morris International. Japan Tobacco, JTI’s parent company, has been relying on the heated tobacco category to drive growth. Ploom’s sales rose by more than 38% last year, giving it a 14.4% share of the heated tobacco market. Although executives warned that the tax policy change could temporarily slow growth in the category, they said heated tobacco remains a key long-term driver of revenue growth.
