Japan min eyes tobacco tax at European levels -Kyodo

TOKYO, Nov 1 (Reuters) - Japan's health minister said on Sunday the country's tobacco tax could be raised to levels seen in Europe, reiterating the ministry's proposal forwarded to the government as part of fiscal 2010 tax reforms, Kyodo news agency reported.

"Tobacco poses health problems. It may be necessary to raise it (the tobacco tax) to the levels in Europe," health minister Akira Nagatsuma was quoted by Kyodo as telling a TV programme.

The comment appeared to be in a reference to a recent comment by the vice health minister that the average tobacco price in developed countries is about 600 yen ($6.7) per pack, compared with around 300 yen for a pack of 20 cigarettes in Japan, Kyodo said.

The Ministry of Health, Labour and Welfare last week asked the government's tax panel to increase the tobacco tax by 10 yen per cigarette to raise funds to finance social security measures, likely pushing up the price to about 500 yen a pack, Kyodo said.

On Friday, Prime Minister Yukio Hatoyama told reporters that a hike in the tobacco tax was "possible" considering the adverse effects of smoking on public health, Kyodo said.

Shares of Japan Tobacco Inc (JT) (2914.T), the world's third-largest tobacco firm, ended Friday's trade down 2.4 percent at 256,700 yen as investors cited concerns that a possible tobacco price hike could dampen demand. JT is a former state monoply which controls 65 percent of the domestic cigarette market. ($1=90.08 Yen) (Reporting by Aiko Hayashi)