Wine tax reform: The impact of introducing a volumetric excise tax for wine
AbstractIn addition to the GST, alcohol sold in Australia is subject to excise tax. Although both beer and spirits are subject to a volumetric excise tax, wine is subject to an additional value added tax known as the Wine Equalisation Tax (WET). The recent Henry tax review recommended substantial changes to Australian alcohol taxation policy. Here, the implications for the wine industry of the Henry tax review recommendations are explored using a computable general equilibrium model. The results show that: (i) replacement of the WET with a revenue neutral volumetric excise tax would have a small negative impact on the wine industry; (ii) removal of the WET rebate would have a substantial negative impact on small wineries; and (iii) applying a uniform alcohol tax equal to the packaged beer excise rate across all alcoholic beverages would have a notable negative impact on the wine industry.
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Bibliographic InfoPaper provided by University of Western Australia, School of Agricultural and Resource Economics in its series Working Papers with number 108667.
Date of creation: 06 Jul 2011
Date of revision:
wine; alcohol taxation; general equilibrium modelling; Demand and Price Analysis; Health Economics and Policy; R13; H23;
Find related papers by JEL classification:
- R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
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