South Korean government announces plans to reform alcohol tax system

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The South Korean government is changing its taxes on alcoholic beverages to boost private investment in the sector.
For consumers, this could have the added benefit of lowering prices.
Ko Roon-hee reports.
Since 1968, taxes on alcoholic beverages in Korea have been based on their prices.
This meant that companies producing expensive drinks paid more taxes, which forced them to cut costs in many areas such as research and development.

However, Korea's Ministry of Finance has unveiled new plans to reform the liquor tax system. According to the new measures, taxes on beer and makgeolli will be based on volume or alcohol content … instead of price.
The government plans to include the changes in this year's tax reform proposal … and submit them to the National Assembly in early September.
If it is approved, the change will likely come into force next year.
Chief Financial Officer Hong Nam-ki explained how this change would help improve the country's economy.
"These changes to the tax system will revitalize the craft beer sector (…), which offers a relatively large potential for job creation." In addition, if beer production increases in Korea, employment will boost Upstream and downstream industries, investments in facilities will also increase. "
Minister Hong added that the change would be limited to these two alcoholic beverages, given the rapid impact this could have on the alcoholic beverages sector.
With the change, the tax on beer will reach about 70 cents per liter, which means that consumers will enjoy a cheaper canned and homemade beer.
This announcement came after many brewing companies criticized the current system because of the inequitable differences in taxes between domestic and foreign brands.
Ko Roon-hee, Arirang News.

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