Japan: Government may decide to overhaul beer tax system in fiscal 2017 - sources

Japan’s government and ruling camp are likely to forgo a beer tax overhaul under annual tax system reforms for fiscal 2016, which starts in April, informed sources were quoted as saying by The Japan News on October 21.

This is partly because discussions on introducing a reduced tax rate to cushion the impact of the consumption tax increase from 8 percent to 10 percent in April 2017 are expected to take a long time.

Another reason is that the government and ruling bloc hope to avoid the public feeling a heavier tax burden from the beer tax change ahead of the House of Councillors election in summer next year, the sources said.

Currently, a tax of ¥77 per 350 millilitres is imposed on beer, ¥47 on “happoshu” low-malt quasi-beer and ¥28 on so-called third-segment quasi-beer drinks with little or no malt content.

In its fiscal 2015 tax reform package, the ruling camp said that the differences in taxes affect the product development and sales volumes of beer and lead to lower tax revenue.

Against this background, the government has been considering narrowing the tax differences gradually and introducing a unified tax of about ¥55.

But some ruling bloc officials are now concerned about raising taxes on happoshu and third-segment quasi-beer drinks before the upper house election, the sources said.

21 October, 2015