How do tariffs on Japanese whisky compare to those on sake?

Okay, let me break this down for you, trying to explain it like we're just chatting.

Simply put, if we only compare "tariffs," then the tariff on whiskey is much lower than on sake.

But! It's not that simple, because importing a bottle of alcohol into the country involves more than just tariffs; there are other taxes too. Let's look at these two types of alcohol separately:

First, let's talk about Japanese Whiskey

You can think of tariffs as the "admission ticket" to enter the country. This "ticket" for whiskey isn't actually expensive. In the past, the tax rate was 10%, but later, due to various trade agreements (like RCEP), the price of this ticket has been discounted year by year, and it's now around 5%.

Sounds cheap, right? But hold on, after it gets through the door, there are two other "big bosses" waiting for it:

1. Consumption Tax: This is a big one! The government considers spirits (high-alcohol beverages) not to be necessities but rather luxury items, so they levy an additional tax. As a spirit, whiskey has a 20% consumption tax, plus a volume-based fee (e.g., an extra 0.5 RMB per jin of alcohol).
2. Value-Added Tax (VAT): This is more common, currently at 13%.

So, the total tax for a bottle of Japanese whiskey is calculated roughly like this: low tariff + heavy consumption tax + VAT.

Now, let's talk about Sake

Sake used to have it rough; its "admission ticket" (tariff) was particularly expensive, as high as 40%! That's several times more than whiskey.

However, the good news is that, also due to the trade agreement mentioned earlier, sake's "ticket" is also being heavily discounted, dropping a little each year. It has now fallen to just over 20% and will continue to decrease in the future.

But here's the most crucial point:

Sake is classified as "brewed alcohol," with a relatively low alcohol content, so the government doesn't consider it a spirit. Therefore, it doesn't have to pay that intimidating "consumption tax"! After paying the "admission ticket," it only needs to pay a 13% VAT.

So, the total tax for a bottle of sake is calculated like this: high tariff (but rapidly decreasing) + zero consumption tax + VAT.

To summarize with an analogy:

• Japanese Whiskey: The "entry ticket" (tariff) is cheap, but once inside, it's required to buy an expensive "luxury item ticket" (consumption tax).
• Sake: The "entry ticket" (tariff) is expensive (though it's being discounted), but once inside, there are no further issues; it doesn't need to buy that "luxury item ticket."

So, even though whiskey's tariff rate appears lower on paper, because of the existence of that "consumption tax," the overall tax burden is actually very high, often even higher than sake's. This is why you see many Japanese whiskeys imported through official channels maintaining such firm prices; taxes account for a large portion of the cost. While sake's tariff is high, without the major consumption tax, its total tax burden isn't as exaggerated.

Hope that makes sense!