The ruling Liberal Democratic Party agreed Friday to unify tax rates on beer and beer-like drinks in fiscal 2017 tax reforms, with an eye on adopting a uniform tax rate in October 2026, lawmakers said.
Under the plan by the LDP’s tax commission, the tax rate on beer will be reduced while rates will be raised on happoshu (low-malt beer) and “third-category beer” made from malt alternatives or through a mixture of spirits. Their tax rates will incrementally change to a uniform ¥55.
Currently, taxes on beer and beer-like drinks vary based on malt content. The tax rate on beer is ¥77 per 350-milliliter can, ¥47 on the happoshu low-malt beer and ¥28 on the third-category beer.
The LDP tax panel also plans to seek a uniform tax rate for sake, wine and chuhai cocktails made with shochu spirits and soda, lawmakers said.
Meanwhile, tax breaks for environmentally friendly vehicles set to expire next spring were also reviewed. Senior members of the LDP tax commission studied the government’s plan to extend the measure for more than two years while narrowing the coverage.
Under the current measure, some 90 percent of new vehicle models are eligible for automobile weight tax reductions or exemptions.
The government is considering narrowing the coverage to around 50 percent by adopting more strict fuel-efficiency standards.
At the meeting, some lawmakers called for scaling down the tax breaks more significantly, while others argued for maintaining the current measure to support the automobile industry.
In light of Mitsubishi Motors Corp.’s fuel economy fabrication scandal, which surfaced earlier this year, lawmakers agreed to set up a new rule forcing manufacturers to provide compensation for a tax revenue shortage resulting from overstated fuel efficiency.