South Korean lawmakers suggest maintaining the tax reduction policy for draft beer
The Korean draft beer market is facing severe challenges. In addition to the upcoming expiration of the draft beer tax reduction policy at the end of 2026, the rise of solo drinking and home drinking, as well as the rise of the Japanese draft beer market, pose a threat to the Korean market. Therefore, there have been calls to amend relevant laws and cancel the expired provisions of the draft beer tax reduction policy, aimed at reducing the economic burden on small business owners and ordinary people.
South Korean National Power Party member Kim Eun hye announced on August 9th that she has proposed amending the Alcohol Tax Act to remove the expired clause on the 20% tax reduction for draft beer.
According to Congressman Jin, in order to avoid a significant increase in tax burden, the beer tax system was reformed in 2020, reducing the consumption tax on bulk beer by 20%. This reform applies to beer with a capacity of 8 liters or more that uses independent packaging devices. However, this tax reduction measure will expire at the end of 2026. In 2020, affected by the COVID-19, consumption declined significantly, posing a huge threat to the survival of small business owners.
After the 20% discount policy for draft beer ends, the tax fee for each 500ml bottle of easy to pull cap draft beer will increase by approximately 127 Korean won, including alcohol tax, education tax, and value-added tax. Among them, the alcohol tax will increase by 88.86 Korean won, and the education tax will account for 30% of the alcohol tax.
Congressman Jin pointed out, "This will bring adjustment pressure to factory prices and restaurant prices, ultimately leading to increased burden on consumers
Therefore, Article 8 of the Alcohol Tax Law has been amended to remove the expiration clause that exempts beer sold in containers of 8 liters or more from 20% alcohol tax.
Ten people, including Congressman Jin Shanjiao, joined this amendment.
Councilor Jin pointed out, "For the people who have suffered from heatwaves and high prices, draft beer brings a 'small happiness' to them. Increasing the draft beer tax will ultimately increase the burden on the people. While still maintaining the original system of taxation based on quantity, only increasing the draft beer tax is a disguised form of extortion that will increase the tax burden on ordinary people
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