The Liberal Democratic Party's tax panel plans to cut the number of liquor tax categories to four from the current 10 and put beerlike alcoholic beverages in the same category as beer, panelists said Friday.
The plan, one of the ruling coalition's tax-reform proposals for fiscal 2006, is aimed at simplifying the liquor-tax structure, they said.
The LDP panel is proposing four categories -- beer and beerlike beverages; alcoholic beverages made by fermentation, such as sake and wine; those made by distillation, such as "shochu" and whiskey; and mixed alcohol products, including liqueurs.
The LDP tax panel hopes that reorganizing the categories will lead to narrowing the gaps between the tax rates for alcoholic beverages, each of which is assessed tax based on raw material and production method.
Brewers have been using the current categorization system to their advantage by releasing beerlike beverages, which are taxed at lower rates and subsequently are sold at lower prices.
The tax for so-called third-category beer is currently 69 yen per liter, compared with 222 yen for beer.
While the panel plans to categorize beerlike drinks and beer as the same, the tax rates will remain the same for the time being.
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