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

James Joseph Fogarty and Guy Jakeman

No 108667, Working Papers from University of Western Australia, School of Agricultural and Resource Economics

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.

Keywords: Demand and Price Analysis; Health Economics and Policy (search for similar items in EconPapers)
Pages: 29
Date: 2011-07-06
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwauwp:108667

DOI: 10.22004/ag.econ.108667

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