Greece backtracks on ‘ineffective’ excise tax on wine

19 September 2017
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The Greek government will soon table an amendment to abolish excise duty on wine as it has not brought the desired financial results, Greek Minister for Agricultural Development and Food Evangelos Apostolou said.
Speaking to the Athens News Agency, the Greek minister stressed that the amendment will be submitted for a vote before the end of the year.

“We are expecting that [amendment] before the end of the year, we are working on the relevant regulation as we must, according to the deal that we have signed [with the lenders], find an equivalent to replace the tax revenue from wine,” Apostolou noted.

In an effort to increase public revenue as part of the bailout programme, the Greek government introduced in 2016
an excise tax on wine triggering the strong reaction of the sector.

However, the decision turned out to be a lose-lose game for all parts involved. Public revenues were not increased and at the same time, the black market flourished, dealing a severe blow to the country’s wine sector.
In particular, from the €60 million budgeted, only €14 million was collected.

“We supported from the very beginning the arguments suggesting that we need to put an end to this excise tax,” Dr Ignacio Sánchez Recarte, the secretary general of the EU wine association (CEEV), told EURACTIV.
He stated that the excise tax was not a good idea as it created a huge administrative burden for both producers and the government.

“Several cases of wine transport have been spotted without the proper documents,” he added.
According to press reports in Athens, the illicit distribution of wine has reached 70%. In addition, the decline in sales of legitimate wineries is now visible, with a 40% fall in turnover compared to 2015 and a 25% decline since 2016.

Imposing taxes on alcoholic beverages is another way of decreasing alcohol consumption to protect public health. The World Health Organisation and the Organisation for Economic Co-operation and Development (OECD) recommend the use of taxes as an effective tool to reduce alcohol-related harm.

But the alcohol industry does not share such a view. On the contrary, it warns that in the past alcohol taxation did not have a positive effect on consumption and finances

SpiritsEurope, which represents the spirits industry, recently cited Greece as a perfect example of the case.
“In the period 2009-2010, the excise tax on alcohol was increased by 125% but the state revenues fell to €272 million in 2015 from €289 million in 2009. Overall, the result of increased taxes was reduced revenues and a steep rise in illicit trade, especially from Bulgaria,” the spirits industry told EURACTIV.

Source: EURACTIV

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