Wine taxes

Following on from last week’s discussion about wine tax are some suggestions from industry how reform of tax can meld with focusing on rebuilding demand to assist industry recovery. So what are some of the ideas put forward so far? Provide resources for marketing. Australia has a relatively low marketing budget, and with the projected savings from suggested changes to the WET rebate; an injection of an additional $44M into marketing and promotional activities into key markets will capitalize on current favorable trading conditions.

Do it NOW! As mentioned above, currently exchange rates and free trade agreements in Asian markets give ideal conditions to expand our exports. However, failure to act soon may mean that we miss the prize.

Reform WET rebate compliance. Improve the compliance aspect of current tax legislation to stop rorts and unintended consequences. Reform the rebate to the original intent – limited to support of regional business that is important to tourism and other industry in the regions.

Phase out the rebate on bulk and unbranded wine over four years to remove the unintended outcomes such as boosting retailer’s own brands at the expense of other product, and the downward pressure on wine and grape prices.

Remove rebate from foreign wines sales. Currently it is easier for some imports to access rebate than it is for Australian wine companies.

Encourage consolidation during a period of adjustment. Allow merging companies to access current rebate during a period of adjustment, so that they can remain competitive while during transition.

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