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Wine tax reform: The impact of introducing a volumetric excise tax for wine

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  • Fogarty, James Joseph
  • Jakeman, Guy

Abstract

In 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.

Suggested Citation

  • Fogarty, James Joseph & Jakeman, Guy, 2011. "Wine tax reform: The impact of introducing a volumetric excise tax for wine," Working Papers 108667, University of Western Australia, School of Agricultural and Resource Economics.
    • Handle: RePEc:ags:uwauwp:108667
    DOI: 10.22004/ag.econ.108667
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    File URL: https://ageconsearch.umn.edu/record/108667/files/WP110018.pdf
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    References listed on IDEAS

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    Cited by:

    1. Fogarty James J., 2012. "Optimal Alcohol Taxes for Australia," Forum for Health Economics & Policy, De Gruyter, vol. 15(2), pages 1-26, February.

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