You may have or not read my previous post on the Wine Equalisation Tax and may agree or disagree with my view that the small winemaker will not be affected much by changing the tax on wine from Ad Valorem to Volumetric.
After chatting with many boutique operators I always get the same response:
"But if the WET goes I won't get my rebate"I want to analyse this phrase and break it down in to what we are talking about. There are actually 2 separate parts to the current wine tax system, but for some reason they have become "married". They are:
- A tax on wine. Currently a Wine Equalisation Tax (WET) of 29% then GST of 10%
- A rebate. For the first $1,000,000 of sales you get the WET tax back
How does changing the Tax change the Rebate? The fear is that "if the Government change the tax system, it will all go". Maybe, but what if it doesn't. Why can't the tax system look like this:
- A tax on wine. Volumetric tax at the rate of $0.16 per standard drink
- A rebate. For the first $1,000,000 of sales you get the Volumetric tax back
I would love to see the divorce of the thinking that to "have a rebate you have to have a WET". And with this new system, every small winemaker (below $1,000,000 of sales) would pay exactly the same rate of tax, the GST 10%.
It is right for the wine industry to have a tax rate based on the volume of alcohol, as it can be such a damaging drug in the wrong hands. I want this debate to continue.
Thoughts?
I think that one of the problems with The wet rebate is the exploitation of it. I don't fully understand how it is exploited, but this needs to be changed if we move to a volumetric tax with a rebate.
ReplyDeleteIncredibly simple. The tax is 29% so cheap plonk at a $ or so a litre only attracts a tax of 29c to 58c per litre for 12-13% alcohol. Beer on the other hand at 5-8% alcohol attracts a tax per the amount of alcohol which is far higher. It equalises at about $8 wholesale per 750ml bottle of wine. Forget alcopops. That was just pollies getting sucked into their own cavities around their sophisticated cleverness in 'percieving the power of marketing'. Cheap wine by the casket is, I am reliably told by my mate who works in a bottle shop, the chosen drink of 16-24 year olds. Hence the clever, popular, excited legislation around alcopops at the commencement of the labour project was in fact just another entirely brain dead delivery (talk to a barmaid guys, rather than your terribly clever chums).
DeleteThe Article Vineyard Paul refers to below refers to other technical production scams, so it is worth a read...
DeleteFor exploitation of the WET check out Phillip White's Drinkster blog here. Scroll down to the Zombie photo.
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