Govt lobbied to change way it collects wine tax

Steve Green
Steve Green
The Government is at least considering switching the collection of its $145 million alcohol excise from winemakers to retailers, a Bannockburn winemaker says.

New Zealand Winemakers recently called on the Government to make the change and Steve Green, the principal of Carrick Wines, chairman of the Wine Institute and deputy chairman of New Zealand Winegrowers, said the Government had shown enough interest in the idea for it to ask winegrowers to put a case for change.

"That's not to say they will end up agreeing with us, but they can see there are merits in what we're proposing," Mr Green said.

Winemakers New Zealand asked the Government to consider switching from excise levies - an indirect tax on alcohol collected by the Customs Service - to a specific tax charged on retail sales.

"The purpose of the Government looking at a tax at the point of sale is that it would be a tax on consumption, not production," Mr Green said.

The current system placed huge demands on wineries' cashflows, he said.

"The excise is payable at the end of the month that the wine leaves the winery. It might be payable then, but in many cases, under their terms of trade, the winery hasn't been paid for its wine at that time."

The excise tax was a tax on manufacturing that was absorbed by winemakers, rather than being passed on to consumers, Mr Green said. This was felt more during the recession, but it had been an issue for many wineries for the last seven or eight years, he said.

Putting the tax at the point of sale could also help with some of the social issues related to alcohol consumption, he said, an idea that was raised with Sir Geoffrey Palmer, the New Zealand Law Commission president who recently oversaw an 18-month review of New Zealand's liquor laws.

Both the United Kingdom and the United States collected excise taxes from retailers, Mr Green said.

"In Australia, they tax at the production level, but some degree of that production is exempt."

- colin.williscroft@odt.co.nz

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