Polish Government To Make Up Deficit With Alcohol Tax Hike

by Ulrika Lomas, Tax-News.com, Brussels

16 December 2008

The polish beverage sector is to face another excise tax increase on January 1, 2009, when tax on cigarettes will also experience a hike.

The Polish government announced last week that it plans to hike the excise tax on alcohol in 2009. The legislation will increase excise duty for wine by 16%, and for beer and vodka by 13% and 10% respectively.

The Polish Ministry of Finance has said that the increased excise duty will make up for shortfalls in the state’s 2009 budget.

The Polish parliament previously increased the tax in 2005, when it was raised by 3.4%. Budget revenues were expected to grow some PLN300m (EUR76m), but instead they declined PLN130m.

Leszek Wiwala, CEO of the Polish Alcohol Industry stated this week that he believes the hike will lead to as much as a 20% drop in sales which will in turn result in a decrease in tax revenues.

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