The ruling Liberal Democratic Party's tax panel is contemplating a sweeping overhaul of liquor taxes in fiscal 2006 to simplify the categorization of alcohol into four groups from the current 10, a key panel member said Friday.
Bunmei Ibuki told reporters that he envisions the four classifications to be "brewed liquor," such as sake, "sparkling liquor," which includes beer, "distilled liquor," for domestic "shochu" and whiskey, and "other liqueurs."
Each category would have several tax rates based on ingredients and alcohol content.
A revision of the taxes is expected to lessen the differences in the rates.
The levy for beerlike alcoholic beverages -- popular due to their low prices, which stems from low tax -- would most likely remain at the same rate, sources said.
However, the LDP tax panel is considering applying the highest tax in each category for any new products introduced to take advantage of the tax loopholes. This appears to be aimed at putting an end to firms developing drinks that will sell at a low price.