South Korea abolishes price indexation system for sake and beer due to revision of liquor tax law

In order to prevent the prices of doburoku and beer from skyrocketing, the South Korean government has decided to keep taxes on these alcoholic beverages constant regardless of the rate of inflation.
The South Korean National Assembly held a plenary session on the afternoon of the 21st and voted on a bill to partially revise the Liquor Tax Act, which incorporates the above content. This day,
The revised bill was passed with 252 of the 260 members present in favor, three against, and five abstentions. The South Korean government has proposed a bill to revise the Liquor Tax Law in this year's tax law reform bill due to the sharp rise in alcoholic beverage prices last year.
did. The revised bill was also designated as a supplementary budget bill, and was passed through the Diet along with the 2024 budget bill at the plenary session on the same day. The previous Liquor Tax Law required the inflation rate to be reflected in the annual liquor tax rate.
``Inflation indexation system'' has been applied. As a result, the tax rate will increase even though there is no factor to increase the export price or import declaration price of beer and doburoku.
It has been pointed out that many people (such as self-employed people and self-employed people) are facing financial difficulties. This is because if the price of alcohol increases and it is reflected in the inflation rate, it will also affect the production and distribution margins of alcoholic beverage manufacturers. Also, based on this,
As a result, the price of beer and doburoku skyrocketed, creating a vicious cycle. The proposed amendment would change the tax rates for sake and beer, which had been adjusted according to the annual price increase rate.
The price was fixed at 44,400 won and 885,700 won per kilogram. The bill also included a presidential order to adjust the liquor tax rate within the 30% range. Tax burden level and alcoholic beverages
The idea is to consider price stability. The revised bill also includes an extension to the special system that reduces tax rates on draft beer. This is to support the business stability of small businessmen in the alcoholic beverage industry.
This is a precautionary measure. Beer sold in containers larger than 8 liters using separate brewing equipment is taxed at 80% of the tax rate for regular beer. This measure was scheduled to expire on the 31st of this month.
is scheduled to last until December 31, 2026. The National Diet Planning and Finance Committee evaluated the proposed amendment, stating that ``irregular tax rate adjustments will improve price stability in the alcoholic beverage market and improve the efficiency of tax rate adjustments.''
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