Japan intends to speed up its timetable for reducing the disparity between taxes on whiskey and "Grade B" domestic "shochu" spirits by one year so that the rates will be almost the same beginning in October 2000, government officials said Monday.
The Finance Ministry put forth the proposal at the day's meeting of the Liberal Democratic Party's Research Commission on the Tax System. Initially, Japan had intended to reduce the difference in tax rates per degree of alcohol in two more stages to 10.22 yen for whiskey and brandy, and 9.92 yen for Grade B shochu from October 2001.
The first stage of the corrective measures was taken in October. But the United States said Japan's timetable was too slow in complying with a World Trade Organization ruling last year that the gap in tax rates discriminated against imports. Tokyo had been trying to seek a middle ground between external pressure and LDP officials backed by shochu distillers, many of which are small businesses.
Under Monday's plan, the government would eliminate a partial increase in the shochu tax that was to take effect next October and instead make one larger increase in October 2000. At the same time, the final rise in the tax, which was to take place next October, would be moved ahead to take effect in May.