No one likes paying tax unnecessarily. Nevertheless the vast majority of wage earners and businesses realise it’s only reasonable to pay one’s fair share.
At this time of year most are keen to lodge tax returns and hope for a refund large or small.
For some, there is the possibility of a rebate when the ATO returns a portion of tax previously paid when certain conditions have been met. One such rebate that operates in the wine industry is known as the WET rebate, short for Wine Equalisation Tax rebate. This was first offered to the industry in the late 90s when GST was introduced. Its purpose was to ensure that those who operated cellar door sales would not be disadvantaged by the new tax regime that replaced the wholesale sales tax regime to the detriment of those businesses and regional tourism. It made sense. Operators were not complaining. Times were good.
What was not foreseen, was the Free Trade Agreement between Australia and New Zealand that would provide for New Zealand producers to claim the rebate for NZ wine sold in Australia, and we all know how popular NZ Sauvignon Blanc has become. So much so that the rebate, calculated at 29% of the final wholesale price, has provided NZ producers with a very substantial competitive advantage over local producers; something of an unintended consequence; a great reason to always buy local if you can and support local industry and jobs.
Riverland Wine is working closely with the peak industry bodies WFA and WGGA to find a solution to this tax challenge and continuing to keep the pressure on Canberra to demand strong evidence from the health lobby and others who keep pushing hard for a volumetric tax. To that end, Riverland Wine is also supporting another campaign “Supporting Australian Wine” as in 2011 prior to the delivery of the Ken Henry report that recommended such a tax, despite the obvious harm it would inflict on the industry, particularly regions such as the Riverland.