Tax games
The Ministry of Finance and Economy and the ruling coalition parties agreed that from 2000 the tax rate on soju will be raised from 35 per cent to 80 per cent. This tax hike will increase the retail price of a 360ml bottle of soju from US58 cents to US78 cents. Sales of soju are expected to fall by 13 per cent. The ministry and the government also agreed to lower the tax rate on whisky from 100 per cent to 80 per cent and to gradually bring down the rate on beer from 130 per cent to 120 percent in 2000. Further rate cuts on beer are expected in 2001 (110%) and in 2002 (100%). Soju brewers have strongly opposed the tax reforms, saying that many soju brewers will face bankruptcy if the rate is raised by more than 10 per cent..
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