Seminar paper from the year 2011 in the subject Economics - Case Scenarios, grade: 1.7, University of applied sciences, Munich, course: MBA, language: English, abstract: Executive Summary: Governments are trying to motivate people quite smoking with various bans and anti-smoking campaigns but still try to milk smokers with tax hikes on tobacco products. This assignment is describing the Japanese tobacco tax policy which has seen just recently, 1st of October 2010, a major change. As Japan is the only devel-oped country in the top ten smoking statistic, with a male smoking rate of close to 50%, the Japanese Ministry of Health, Labor and Welfare has pushed and driven a 40% tobacco tax hike with the aim of discouraging smokers. Further on, economical aspects on tobacco consumption are analyzed in general and with respect to tobacco tax hikes. The relations are explained on supply and demand curves utilizing given elasticity factors of tobacco demand from the OTC. Due to the rather inelastic demand of tobacco which is mainly supported by its addictive nature, tax raises will have different effects depending on the age of smokers but mainly depending on social aspects. A tax raise will cause a higher quite rate in developing countries with a low or mid income such as China for instance compared to developed ones like Japan. On the other hand, in devel-oped countries the gain in tax revenue will be higher compared to developing countries. At the end of the assignment tax strategies aiming for higher tax revenue or aiming for a lower smoking rate are discussed besides general aspects.