TOKYO: Japan Finance Minister Taro Aso’s advisory panel urged the government on Monday to keep its stake in Japan Tobacco Inc for now, a move that would alter a plan to use revenue from share sales for funding the cost of post-earthquake reconstruction.
In an interim report handed to the minister, the Fiscal System Council said it would not be judged appropriate to sell the government’s stake in the tobacco firm at the moment, which is owned over a third by the government, worth about 3 trillion yen ($24.38 billion).
A finance ministry official said the panel hopes its proposal will be reflected in the government’s debate over reconstruction financing.
Japan will increase spending on reconstruction for areas affected by the 2011 earthquake and tsunami by 6.5 trillion yen in the five-year period from the next fiscal year that starts in April 2016, a government source told Reuters this month.
The ministry’s panel largely agreed that the government should stick to its goal of completing privatisation of the tobacco company by selling all of its shares eventually.
The proposal is not aimed at protecting tobacco farmers, the official said, adding however that the government needs to examine impact of share sales on farmers and retailers, and to prepare legislative steps pertaining to the tobacco industry.
