Japan by the Japanese/Chapter 18.7

In January, 1876, the Imperial Government of Japan first brought the taxation of tobacco under a systematic regulation by putting into operation the newly-enacted ‘Law Relating to the Tobacco Tax.’

Notwithstanding frequent amendments, the system of tobacco taxation thus introduced remained for some years—many years—practically unchanged, the essential feature being the imposition of a stamp duty on manufactured tobacco in addition to the business tax which the manufacturers of and dealers in tobacco had to pay in common with other classes of tradesmen.

For the successful prosecution of the various important public undertakings after the Chino-Japanese War of 1894–1895, it was considered by the Government necessary to increase the national income. This necessity was met on the one hand by the imposition of new taxes, and on the other by the increase of the existing taxes.

Of the old forms of taxation thus readjusted, the most extensively affected was the Tobacco Tax, the sale of leaf tobacco being made the Government monopoly under the ‘Law of Leaf Tobacco Monopoly,’ which was enacted in March, 1896. On the coming into force of that law, the previous law of taxation on tobacco was abolished.

The principal points of the new law were as follows:

Every cultivator of tobacco-leaves is required, every year, to submit to the Government a written statement about the area of his tobacco-plantation.

He is required to have the leaves examined by Government officials, both before they are harvested and after they are dried.

After they have been dried, the leaves must be brought to places indicated by the Government by the last day of March of the next year at latest.

The Government, on inspecting and judging of the qualities and classes of these leaves, pays an appropriate compensation to their cultivators, according to a schedule previously fixed and notified by the Government.

The tobacco-leaves thus handed over to the Government are to be sold at Government prices previously fixed for them.

The cultivators of tobacco-leaves are strictly prohibited ​from purchasing leaf-tobacco either directly from the Government or from the dealers.

The leaves cultivated for the purpose of exportation may be sold individually under the permission of the Government, but such leaves must be placed in official custody.

In case the above-mentioned leaves have not been exported within one year after they were put in official custody, they are to be transferred to the Government on payment of appropriate compensations to their owners.

This law was put in force on the 1st of January, 1898. At the same time there were established sixty-one leaf tobacco Monopoly Offices throughout the country, where the collection, sale, and management of the leaves are carried on.

It was, however, found that some points of the law were inconvenient in practice, and consequently in March, 1899, some necessary amendments were effected, the more important of these amendments being as follows:

To regulate the districts for cultivation, and to limit the area of every cultivating field, as well as the sorts of tobacco to be cultivated, with reference to the condition of the markets.

Foreign tobacco-leaves shall be imported and sold by the Government only.

Every manufacturer of tobacco and leaf-tobacco dealer shall apply for and receive a license every year. In case of a manufacturer operating more than one factory, he is required to obtain a separate license for each factory.

Such a manufacturer or dealer shall pay 50 yen for each license mentioned in the foregoing paragraph.

The tobacco-leaves may, if necessary, be sold at auction, instead of at the prices fixed for them.

The object aimed at by these amendments is:

To prevent overcultivation.

To secure the more perfect management of the monopoly.

To reserve the power of importing tobacco-leaves to the Government, thus enabling the maintenance of a proper balance of prices between the domestic and foreign leaves.

To prevent smuggling.

To safeguard against unprofitable sales.

This amended law was put in operation on the 22nd of March, 1899, and the districts for cultivation, after careful investigations, were regulated in November, 1900, while the varieties of tobacco and the areas of cultivating fields were indicated in 1901. Thus, the fields were well arranged, the method of cultivation was improved, and, moreover, the importation of foreign leaves was kept within the limits required for the manufacture of imitation foreign cigarettes. Yet the ​secret cultivation and smuggling of leaves were not entirely prevented. For this and other reasons it became necessary to introduce further amendments into the monopoly system.

The chief points of the newly-revised Law of the Leaf Tobacco Monopoly, which came into force on the 29th of April, are as follows:

Every cultivator of tobacco should receive permission of the Government.

The cultivators are obliged to cultivate tobacco according to the methods and processes prescribed by the Government.

The harvest quantity and the number of leaves shall be investigated and estimated by the Government; but if the cultivator is dissatisfied with such estimate, objection may be made at once.

When such objection is made, two or more appraisers shall be selected, and after hearing their opinions the point at issue shall be decided by the Government.

When a cultivator, without sufficient reasons, fails to deliver to the monopoly office the quantity or number of leaves officially estimated, he shall be required to pay an amount of money corresponding to the value of the deficient quantity or number of leaves.

Leaves may be sold to exporters by the Government at special prices, but such leaves shall be put in the custody of the Government until their actual exportation.

The manufacturers’ guild, which every manufacturer is required to join, shall be established according to law.

The system thus amended is now in force, and brief as is the period of its operation, its working has been very successful. At first there were sixty-one Leaf Tobacco Monopoly Offices, but afterwards, instead of them, there were established a Central Bureau and its forty-three branch offices, the former in Tokyo, and the latter at different important places throughout the country.

Herewith are given some statistics concerning tobacco since 1894:

(The loss in 1897 was owing to the fact that it was the first year in which the law was carried out in practice.)