The goon show – How the tax system works to subsidise cheap wine and alcohol consumption
The goon show: How the tax system works to subsidise cheap wine and alcohol consumption
This paper presents an overview of the Wine Equalisation Tax (WET) in Australia and compares the current system with some reform alternatives and systems in other countries.
When the GST was introduced in July 2000, wine products were given special tax status. While beer and spirits attract an excise based on the volume of alcohol (a volumetric tax), wine is instead taxed on the wholesale value (an ad valorem tax). As a consequence, cheap wine attracts far less tax than beer or spirits, and is by far the cheapest potable alcohol commercially available in Australia.