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Australia Urged To Include Alcohol Tax Reform In Next Budget

by Mary Swire, Tax-News.com, Hong Kong

04 January 2018


An Australian lobby group has called for a number of changes to the way alcohol is taxed.

In its pre-budget submission, the Foundation for Alcohol Research and Education (FARE) suggested introducing a volumetric tax alongside the current wine equalization tax (WET) and requiring producers to pay the larger of the two.

It said Australia should lift the volumetric rate over time to capture an increasing proportion of "excessively cheap" wine and fix the volumetric tax on wine at a level "commensurate with its strength."

It suggested that tax on wine should settle at a level of level between that for full-strength draft beer and spirits.

It added that draft beer should be subject to the same tax rates as packaged beer.

The group says the reforms would save the Government AUD2.9bn (USD2.3bn) a year and reduce alcohol consumption by more than 9.4 percent.

The proposals have been called ""misguided, lazy and flawed" by Australian brewers, who reject the suggestion that beer is cheap in Australia.

Brewers Association of Australia CEO Brett Heffernan said:"Australians pay amongst the highest excise on beer in the world. Then we pay a further 10 percent in goods and services tax (GST) on top of that. Last year, taxes on beer drinkers alone netted the Australian Government almost AUD2.4bn (USD1.9bn). In fact, research from the University of Adelaide in 2014 shows that in Australia beer is taxed at more than twice the OECD average.

Heffernan also noted that the excise tax on beer in Australia is automatically increased by the Government every six months.

TAGS: tax | law | budget | goods and services tax (GST) | Australia | excise duty | tax rates | services | Education | Education

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