Starting Next Year, 'Chamisul' Factory Price Drops from 1247 to 1115 Won... Will Consumer Prices Also Decrease?

National Tax Service Sets Standard Sales Rates for Domestic Distilled Spirits: Soju 22%, Whiskey 23.9%, etc.
Domestic Distilled Spirits Rates Effective from January 1 Next Year
Liquor Industry Says "Need to See if It Leads to Lower Consumer Prices"

Starting January 1 next year, the factory shipment price of 'Chamisul,' a representative soju brand, will be lowered from 1,247 won to 1,115 won. This is due to the introduction of the standard sales ratio, a tax discount rate concept for domestic alcoholic beverages.

On the 14th, the National Tax Service held a Standard Sales Ratio Deliberation Committee and announced on the 17th that the standard sales ratio for soju was set at 22%. The standard sales ratio is the rate deducted from the tax base when calculating liquor tax.

An official from the National Tax Service explained, "Considering comprehensively that the standard sales ratio is being introduced for the first time, fiscal conditions, social costs caused by drinking, and the impact on prices, the decision was made. The standard sales ratio for domestic distilled liquor will be applied from shipments made on January 1 next year, and for fermented and other liquors, it will be implemented from shipments on February 1 next year after deliberation by the Standard Sales Ratio Deliberation Committee in January."

The standard sales ratio was introduced to resolve the issue of tax burden differences between domestic and imported alcoholic beverages. Quantity-based liquor tax imposes tax per volume, so there is no tax burden difference between domestic and imported liquors. However, for price-based liquor tax, the tax base differs due to the timing of tax imposition between domestic and imported liquors, causing reverse discrimination in taxation. Domestic liquors are taxed based on the 'shipment price,' which includes distribution costs and profits, whereas imported liquors are taxed on the 'import declaration price,' which does not include these costs, resulting in a heavier tax burden on domestic liquors.

With the implementation of the standard sales ratio, the tax burden on domestic liquors related to liquor tax and education tax will decrease, thereby lowering the shipment price accordingly. According to each company, Chamisul's price will be reduced from 1,247 won by 132 won (10.6%), whiskey The Sapius from 25,905 won by 2,993 won (11.6%), and brandy Ludo Big from 79,800 won by 3,086 won (3.9%).

Kim Tae-ho, Deputy Commissioner of the National Tax Service, said, "The introduction of the standard sales ratio is expected to contribute to strengthening the competitiveness of domestic liquors by rationalizing the liquor tax base for domestic liquors, enhancing tax burden equity with imported liquors, and creating an environment where they can compete under equal price conditions. Active guidance and promotion are also necessary to ensure that the effects of this system reach the consumer level."

However, it remains to be seen whether the reduction in shipment prices will lead to lower consumer prices as the government expects. An industry official said, "Soju is supplied to consumers through wholesalers and retailers, with margins added at each stage. It is difficult to expect that a lower factory shipment price will immediately lead to a reduction in consumer prices."

On the 14th, the Standard Sales Ratio Deliberation Committee reviewed the standard sales ratio that adjusts the tax imposition criteria for domestic alcoholic beverages.

This content was produced with the assistance of AI translation services.