Japan urges young people to drink more alcohol to boost tax revenues

Japan is taking the path less-travelled in its efforts to boost tax revenues by launching a campaign inviting youths to send in their ideas on how to increase the consumption of alcohol.

The Sake Viva! campaign, run by the country’s national tax agency, asks 20- to 39-year-olds for proposals that could make alcoholic drinks more popular. These may include new products and designs, ways of making home drinking more attractive, and innovate sales methods, such as through the metaverse.

Taxes on alcohol are a significant element of the Japanese Government’s income, accounting for 1.7 per cent of its tax revenues in 2020. However, this represents a fraction of the historical figure – in 2011, it stood at three per cent, and in 1980, a whopping five per cent.

Total revenue from taxes on alcohol amounted to ¥1.1 trillion in 2020, dropping by more than ¥110 billion when compared to 2019 – the biggest fall in alcohol tax income in 31 years.

Changes in people’s habits and lifestyles have been exacerbated by the pandemic, with post-work drinks, a widespread practice in the Japanese work-social landscape, experiencing a fall in popularity.

A tax agency official told The Japan Times: “As working from home made strides to a certain extent during the COVID-19 crisis, many people may have come to question whether they need to continue the habit of drinking with colleagues to deepen communication. If the ‘new normal’ takes root, that will be an additional headwind for tax revenue.”

Beer sales have been hit especially hard, with a 20 per cent drop in total sales value. Meanwhile, Kirin brewery, producer of some of Japan’s most popular beers and domestic distributor for top foreign brands like Heineken and Budweiser, reported a decline of over nine per cent in per capita beer consumption in 2020.

The Sake Viva! campaign runs until 9th September, with the finalists celebrated in a gala awards ceremony on 10th November. The eventual winner may have their ideas commercialized, with support from the tax office.