Tokyo, Dec. 2 (Jiji Press)–The Japanese government and ruling camp are planning to abolish the liquor tax reduction for “awamori” distilled liquor and beer manufactured and sold in the southernmost prefecture of Okinawa by 2032, informed sources said Thursday.
The move is aimed at encouraging breweries in Okinawa to boost managerial efforts and grow their businesses in a self-reliant way.
While the Japanese government has scaled down the amount of the tax cut, the tax reduction system itself has been in place since its introduction in 1972, when Okinawa was returned to Japan after the post-World War II U.S. occupation. Under the system, the liquor tax is reduced for products manufactured and shipped within Okinawa by businesses that have brewed alcohol since before the prefecture’s reversion to Japanese administration.
The tax cut allows businesses to provide consumers with affordable alcoholic beverages, as well as updating to the latest production equipment and creating and expanding local employment.
Some within the central government and ruling parties, however, said that local breweries need to make management efforts, as Okinawa will mark the 50th anniversary of its return to Japan in 2022.
The tax reduction will be phased out, as the novel coronavirus pandemic has made a significant dent in consumption.
The 35 pct tax cut currently applied to awamori will gradually be reduced from May 2024 and abolished in May 2032. The 20 pct tax reduction for beer products will be narrowed to 15 pct in October 2023 and completely removed in October 2026.