Decanter World Wine AwardsAbolish WET tax, major Australian producers urge government
- Tuesday 27 September 2011
Yarra Valley (Image: Wine Australia)
The Wine Equalisation Tax (WET) exacerbates the country's oversupply problems, Premium Wine Brands and Treasury Wine Estates say.
WET is a value-based tax paid on both New Zealand and Australian wines consumed in Australia.
It entitles producers to an annual rebate of 29% up to a maximum of AUS$500,000 and is widely seen as beneficial to smaller producers.
In its submission to the government, Treasury estimates that AUS$900m is collected as WET each year, with more than $200m returned to producers as a rebate, of which $30m goes to New Zealand producers.
Both Pernod Ricard-owned Premium, and Treasury Wine Estates, claim WET distorts market forces, has enabled unsustainable players to survive, and hindered consolidation.
Premium Wine Brands CEO Jean-Christophe Coutures added 'Industry efforts to restructure have not succeeded and there is an urgent need for intervention to remove impediments to the restructure process – we believe that this includes the current wine tax arrangements'.
Have your say!
Ken Sloan
November 24 02:12
The problems with the Australian WET tax rebate arose when it was extended from its original form.When introduced the rebate was only able to be claimed on cellar door sales and was capped at a maximum rebate of $145000.
The reasoning behind the rebate was that it was seen as a method of assisting in the growth of wine tourism in regional areas that had historically high unemployment rates and not many other prospcts of economic growth.
This worked very well and and did indeed lift sustained wine tourism markedly in many areas throughout Australia.
When the WET was revised it was decided to include wholesale sales and also to raise the limit to the present figure.
This was done and then the Govt. realised that because of the CER (closer economic relationship) with NZ the Kiwis were entitled to the rebate.
I strongly believe,and have written to the Australian Tax Office and the Treasurer suggesting this, that the rebate should revert to its original form.
Doing this would restore the equity between wholesalers and continue to assist regional employment and wine tourism growth.Being so simple to do it will probably never happen.Shame.
Rupert Degas
September 29 15:39
Let's not forget that WET is also payable on ALL wine imported into Australia. Along with VAT and Import Duty that can amount to 49% of a wine's current market value!
For anybody with a wine collection hoping to emigrate to Australia, you better get drinking before you go, because it will cost you a tidy sum just to get it in the country.
So, there's another reason why this ridiculous, out-dated and prohibitive tax should be abolished as soon as possible.