By Andy Young
The Australian Distillers Association, the industry body for this country's craft distillers, has made its submission to the government's tax submission paper, calling for the introduction of volumetric tax.
As has been common with all submissions, the ADA recognises the responsibility of paying excise, but has added that the current system is “illogical and unnecessarily complex”.
The report states: “Alcohol beverages are divided into 16 different excise categories, with seven different excise rates. In addition to this, wine and traditional cider are taxed using a completely separate regime altogether, under the Wine Equalisation Tax.
“As the Government is seeking to transform the existing system to one which delivers lower, simpler and fairer tax, the ADA strongly recommends that alcohol tax be part of the Government’s reform agenda.”
The key recommendations laid out by the ADA in the report are:
- The Government freeze the indexation of alcohol excise with a view to transitioning toward a single volumetric alcohol taxation rate.
- The Government move the excise rate for all spirits to the same rate as brandy and freeze excise at that rate with a view to transitioning toward a single volumetric alcohol taxation rate.
- The Government provide a rebate the first $300,000 excise paid by Australian-based and owned distillers to encourage the development of the local industry and boost employment in the sector.
- That the payment terms of excise payable to the ATO be brought into line with the payment terms distillers receive from domestic retailers. Commercial trading terms vary between 60 and 90 days after the date of invoice or month-end from invoice. We would propose excise being payable 60 days after excisable stock has left any bonded warehouse into the retail trade arena.
President of the ADA, Stuart Gregor said: "This tax reform will enhance the continued growth of a burgeoning Australian industry that expands support of domestic agriculture and increases exports of Australian goods.
"Further, it will allow craft distillers to continue to innovate, create Australian-based advanced manufacturing jobs, as demanded by the Treasurer in the 2015-16 Budget speech, support Australian agriculture, support tourism export through visitor centres and tasting rooms, and compete effectively in the marketplace with competitively-priced handcrafted spirits.
"Finally, this tax streamlining will result in a negligible short-term revenue impact while promising a significant increase in federal revenue as the domestic craft distilling industry grows.