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Ministry of Economy, Trade and Industry
Osaka Proposal for 2025 World Exposition

Preparations are gearing up to attract the 2025 World Exposition to Osaka. On December 16, a committee of experts from various fields, organized under the auspices of the Ministry of Economy, Trade and Industry (METI), held the first of three planned meetings. The committee is expected to issue its recommendations by May. Since 1970, Japan has played host to five such events, of which two (1970 and 1990) were held in Osaka. Two other cities, Manchester, England, and Paris, are expected to vie for the honor.

Among those involved in the committee is Professor Shinya Yamanaka of Kyoto University, recipient of the 2012 Nobel Prize in Medicine for his research on induced pluripotent stem (iPs) cells, and other business executives from Kansai-based pharmaceutical, medical equipment, and precision instrument manufacturers. To boost Osaka’s appeal, individuals from world-famous local firms such as Panasonic Corporation and Suntory Holdings Limited are likely to be involved, along with entertainment agency Yoshimoto Kogyo Co., Ltd., which is representative of Osaka’s famous style of comedy.

The core concept will pursue the theme “Facing the challenge of good health and long life for humankind.” Construction costs are estimated at ¥120 billion to ¥130 billion, and operating costs at ¥69 billion to ¥74 billion. The projected gate will be around 30 million visitors (less than half of the 1970 turnout), with the economic benefits to the region estimated to reach ¥6.4 trillion.

During a press conference at the end of September, Minister of Economy, Trade and Industry Hiroshige Seko (a Kansai native) told media he had already been considering advancing such a proposal. One of the most enthusiastic proponents of bringing the exposition to Osaka is its current governor, Ichiro Matsui, who is a member of the Japan Renaissance Party, which has its power base in western Japan.

Ministry of Finance
Compromise on Beer Tax Revisions

While unification of the tax structure for beer and other sparkling malt beverages had been planned for the next fiscal year, such moves have been postponed due to unfavorable reactions from manufacturers and consumers. Under the proposed new plan, the tax unification will be implemented in three stages between October 2020 and October 2026. However, such measures are regarded as highly irregular, and questions have been raised regarding the viability of drawing out the process over 10 years.

A number of revisions in the tax code for fiscal 2017—such as elimination of the spousal tax deduction, have been delayed—making the unification of taxes on alcoholic beverages more attractive as a source of revenue. The move also appears to be supported by Takeshi Noda, the former Liberal Democratic Party tax commission chief who serves as a senior consultant on deliberations.

While the new system calls for the tax rate on “beer” (defined as containing no less than 67% malt) to decline, the rate on two other types of beer-style beverages that are currently taxed at lower rates will increase, leading to criticism from some quarters that such an rise would pose an unfair burden on economically disadvantaged consumers. Firms in the industry, such as Suntory, for whom beer represents a relatively small product mix, are said to be strongly opposed to such revisions. Delaying the initial increase for two to three years, and imposing the changes at three increments over 10 years, has served to blunt opposition.

The current proposal calls for a reduction of ¥7 on beer (to ¥70 per 350ml) beginning October 2020, and an increase on the cheapest of the three grades (so-called “third sector beer”) by ¥9.8 to ¥37.8. Then, in October 2023, the tax on beer will decline further to ¥63.35 and the tax on both low-malt happoshu and third-category beers will be raised to ¥46.99. In October 2026, all three categories will be taxed uniformly at ¥54.25 per 350ml.

Sapporo Breweries President Masaki Oga was quoted as saying his industry does not particularly welcome the unified tax proposal since “It doesn’t represent a major tax reduction per se.”

Keizaikai magazine