Japan: Japanese Liberal Democratic Party's tax panel decides to increase the tax on beerlike drinks
On December 13, the Japanese Liberal Democratic Party's tax panel decided to raise the tax on beerlike drinks not classified as beer or low-malt "happoshu", according to the Japanese Times.
The yet-to-be-classified drinks, called "third-category beers," would see their taxes go up 3.8 yen per can, when the panel's decision, to be included in the ruling coalition's tax reform outline Thursday, is reflected in the liquor tax system in May, the panel members said.The tax on a 350-ml can of Sapporo's Draft One, for instance, will rise from a little more than 24 yen to about 28 yen.
That's on par with the tax on "chuhai," a separate alcoholic drink made of carbonated fruit juice mixed with "shochu," a distilled liquor.The plan is to flatten taxes on alcoholic drinks containing less than 10 percent alcohol to 80 yen per liter, or roughly 28 yen per can.
The levy is still low compared with a roughly 47 yen-per-can tax on happoshu and the 77.7 yen-per-can levy on beer, Finance Ministry officials said. LDP members also decided to cut the tax on beer by 0.7 yen per can to 77 yen and discussed reducing taxes on sake by about 20 yen and raising the tax on wine by 9 yen to 10 yen per liter.
Under the liquor tax system, a drink is defined as beer only when malt accounts for 67 percent or more of its total ingredients after water is removed. Drinks with less than 67 percent malt fall under the category of happoshu, which is further divided into three tax classes. There are 10 liquor tax categories in all, recording the legacy of brewing innovations and the taxes on those innovations tacked on by the government.
Happoshu, which usually include rice and corn, initially ducked the alcohol tax when introduced a decade ago.The LDP tax panel members said they hope eventually to reduce the 10 liquor categories to four. Under that plan, beer, low-malt beer, chuhai and so-called third beers will all ultimately be taxed at the same rate. Alcohol is an important source of tax revenue in most countries.
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