Tax research commissions of both the Liberal Democratic Party and Komeito on Tuesday finalized the ruling coalition’s outline of taxation reforms for next fiscal year.

In the outline, the ruling parties decided to lower the effective corporate tax rate by a total of 3.29 percentage points by the end of fiscal 2016. The outline calls for lowering the rate by 2.51 percentage points in fiscal 2015 and then slashing it further in fiscal 2016.

As part of the taxation reforms, the ruling parties also decided to abolish special tax reductions for six brands of tobacco products at the end of March 2019. Current rates of tobacco tax for the six brands, including Wakaba, are lower than other brands.

Starting in April 2016 tobacco tax rates on the six brands will be raised every year, and will be the same as those on other brands of tobacco.

Prices of Wakaba, which is priced at ¥260 per 20-cigarette pack including taxes, and Echo, which is priced at ¥250 per comparable pack, will be raised in four stages.

The tobacco tax is, in principle, about ¥245 per 20-cigarette pack. But the current rate on the six brands, which have until now been categorized as “third-grade products,” is about ¥116, which is about a half that applied to other tobacco brands.

The tax rate on the six brands will be raised by ¥20 in both April 2016 and April 2017, by ¥30 in April 2018 and by about ¥59 in April 2019.

Japan Tobacco Inc. intends to pass on the tax increase in retail prices of the six brands of tobacco.

The ruling parties considered raising the light motor vehicle tax on motorcycles in April 2015, but decided to postpone the tax hike by a year.