TalkTax

Over recent weeks two announcements have been made with regard to excise arrangements for wine. The excise rate for all alcoholic beverages will increase from 1 July by 4.5%, in line with the annual increase in the CPI to March 2011. The second announcement was a change in the thresholds affecting the timing of excise payments. This meant that the threshold at which wineries would be able to pay their excise liability annually (instead of monthly) would increase from $10,000 per annum to $50,000 per annum. From a practical perspective this was meant to reduce compliance costs and change the cash flow position whereby smaller wineries are often paying excise before they actually receive payment for wine sales. Or at least that was the intention.
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As a first port of call on the subject of the taxation of the wine industry I felt obligated to touch on the issue that, more than any other issue, makes winemakers whine: excise.

Until 1 July this year, and bearing in mind that the retail price of most wines remains under extreme pressure owing to discounting, approximately $2.15 of the price of each 750ml bottle of wine purchased in a wine shop, supermarket, bar, restaurant, cellar door or online retailer will be attributable to excise.

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