Drive to Lower Liquor Tax on Beer by 28 Percent

A registration lowering a tax on liquor is being driven by lawmakers.

Including Rep. Kim Jung-boo, 17 lawmakers of the opposition Grand National Party on September 30 introduced a revised bill of the liquor tax law which includes lowering the liquor tax on beer from 100 percent to 72 percent, the same as distilled liquor and whisky.

Existing liquor tax law applies a low tax rate to liquors with a high alcohol content such as distilled liquor and whisky, and a high tax rate to liquors with a low alcohol content such as beer. This is done to promote consumption of liquors with high alcohol content, lawmakers indicated.

Due to an absurd tax rate system, the per capita consumption of liquors with a high alcohol is more than double of that of developed county, and social expense due to drinking is 3.6 percent of GDP which is remarkably higher than that of developed country (1-2 percent), lawmakers explained about the background of the revised bill.

The Ministry of Finance and Economy showed unwillingness about the bill as financial revenues from beer sales is large.

In fact, according to a national tax figure, the liquor tax on beer was 1.1642 trillion won, contrasted to 529.6 trillion won for distilled liquor and 214.9 trillion won for whisky.

The recurrence of ‘liquor-tax dispute’ in 1999 is likely to happen.

At that time, the ‘liquor-tax dispute’ was solved by adjusting the tax rate effective from 2001 rate of 35 percent for distilled liquor and 100 percent for whisky to 72 percent and for beer, from 130 percent to 100 percent.

Jin-Hup Song jinhup@donga.com