Japan is facing an unusual problem -- its younger adults are a sober bunch, and the government isn't happy with that. The reason: the sharpest fall in the country's sin tax revenue in the past 31 years in 2020. The liquor tax revenue fell by 110 billion yen ($807 million) in 2020 to ¥1.13 trillion ($8.4 billion) as compared to the previous year, Japan's National Tax Agency data shows.
The government agency has blamed the Covid-19 pandemic, changing lifestyle habits and Japan's ageing population for the declining sin tax revenues. To fix this problem, the country has come up with an unorthodox plan -- it is organising a national competition asking people aged 20-39 year-olds to come up with ideas to boost alcohol consumption in the East Asian country.
The government has launched a national campaign called 'The Sake Viva!', being run by the country's National Tax Agency, to collect ideas on stimulating the alcohol demand among the Japanese youth, according to the country’s media. The government wants to gather fresh ideas for implementing new designs, sales and service strategies in order to revitalise the shrinking Japanese beverages market. These ideas could range from branding to promotions to using modern cutting-edge techs like artificial intelligence and metaverse.
The government data shows that alcohol consumption in Japan has fallen drastically from 100 litres per adult in 1995 to 75 litres per adult in 2020. The alcohol tax revenue share in the government's total tax collection has also dipped from 5% in 1980 to 1.7% in 2020, shows the government data.
The deadly coronavirus pandemic exacerbated this negative trend, leading to a huge fall in the government's revenues from alcohol. During Covid-19, Japan also imposed several curbs, on restaurants and bars, which impacted their liquor sales and forced people to drink at home.
The maximum year-on-year fall of 9.1% in the alcohol tax revenue was also seen in 2020 when restaurants and bars shut shop amid the Covid concerns. At the same time, the sale of non-alcoholic beverages, which don't attract similar taxations, has risen. But, the dipping six tax revenues are a worry for the country.
As part of the nationwide contest, the government will accept entries till September 9 and people can apply as individuals or in groups. After the document screening, the government will organise the final contest on November 10. The government will support and implement ideas that will receive the highest award in the nationwide competition.
According to Japanese media, the government is receiving a mixed response from the public, with some welcoming the government's initiative by giving fresh ideas, while others criticising the government for promoting an unhealthy habit, calling it a “bad move”.
Notably, with the government trying hard to boost revenue, in the year 2021, Japan's liquor tax revenue is expected to rise by 3.7% to ¥1.18 trillion.
