|
|||
|
|||
|
|
Revenue |
2007-08 |
2008-09 |
2009-10 |
2010-11 |
2011-12 |
Australian Taxation Office |
Nil |
$31.79m |
$254.68m |
$259.89m |
$264.96m |
Australian Customs Service |
Nil |
$36.65m |
$144.26m |
$109.61m |
$132.94m |
Impact on fiscal balance |
Nil |
$68.44m |
$398.93m |
$369.5m |
$397.9m |
Similarly, financial implications of the amendment to the definition of beer and grape wine product is predicted to be:[3]
Revenue |
2007-08 |
2008-09 |
2009-10 |
2010-11 |
2011-12 |
Impact on fiscal balance |
Nil |
Nil |
$30m |
$30m |
$30m |
Items 1–11 of Schedule 1 of the Bill amend Column 3 (the rates of duty column) in Schedule 3 of the Customs Tariff Act so that the rates accord with the Excise Tariff Act 1921 (Excise Tariff Act).
Items 12–22 amend Column 3 in Schedule 5 of the Customs Tariff Act to show that the rate of duty for various beverages originating from the US is $66.67 per litre of alcohol.
Items 23–33 amend Column 3 in Schedule 6 of the Customs Tariff Act to show that the rate of duty for various beverages originating from Thailand is $66.67 per litre of alcohol.
Item 3 of Schedule 2 of the Bill repeals the existing Additional Notes in Chapter 22 of Schedule 3 of the Customs Tariff Act and substitutes the proposed definition of ‘beer’ which is in the same terms as the proposed definition to be substituted in the Excise Tariff Act. This amendment is intended the achieve the purpose of ensuring that products which mimic spirit-based RTDs are subject to the same tax rate as RTDs.
The proposed definition sets a combination of minimum limits on bitterness and maximum limits on sugar content that must be present in the final beverage. Amongst other things, ‘beer’:
Items 5, 6, 8 and 9 of Schedule 2 of the Bill make consequential amendments so that references to ‘beer’ in other parts of the Customs Tariff Act reflect the proposed definition.
Section 19 of the Customs Tariff Act allows customs rates of duty for certain alcohol and tobacco products to be adjusted automatically, twice yearly. The section contains a table of customs headings which correspond to the excise item for the same product. The table therefore, links the excise rate to the excise-equivalent customs rate for each of those products.
Items 7, 11, 13 and 15 of Schedule 2 amend customs headings so that the excise-equivalent rate of customs duty for certain beverages is increased to $69.16 per litre of alcohol. The Government increased the excise and excise-equivalent customs duty rate applying to ‘other excisable beverages not exceeding 10 per cent by volume of alcohol’ (alcopops) from $39.36 per litre of alcohol content’ to $66.67 per litre of alcohol content on and from 27 April 2008. This rate was increased to $68.54 per litre of alcohol content on 1 August 2008 and increased again to $69.16 per litre of alcohol content on 2 February 2009 as a result of the bi‑annual indexation of excise and excise‑equivalent customs duty rates.
The Customs Tariff Act does not contain a definition of ‘wine’. Instead that term is defined in section 33–1 of the A New Tax System (Wine Equalisation Tax) Act 1999 (WETA). That Act broadly provides that ‘wine’ includes beverages fermented from any fruit or vegetable and includes alcoholic products such as fruit wines or vegetable wines, cider, perry, mead, sake, grape wine and grape wine products.
The term ‘grape wine products’ is also defined at section 31–3 of the WETA so that it is a beverage containing 70 per cent grape wine. The remaining amount (up to 30 per cent) can contain flavours, although there are some limits on the type and use of ethyl alcohol. The Customs Tariff Act contains a definition of ‘grape wine products’ in the same terms.
Some examples of ‘grape wine products’ are wine cocktails, flavoured wines and Irish style cream drinks, including wine creams. According to the Explanatory Memorandum,
with a combination of flavourings or ingredients a grape wine product could be produced to resemble a spirit-based ready-to-drink beverage product… [which] could be subject to significantly less tax than the RTD product.[6]
Item 2 repeals the Additional Note in Chapter 22 of Schedule 3 of the Customs Tariff Act which contains that definition and substitutes the proposed definition of ‘grape wine products’. Amongst other things a ‘grape wine product’ will be a grape wine-based beverage that:
Item 2 also inserts a definition of ‘wine’ which will encompass grape wine, cider or perry, fruit or vegetable wine, mead and sake: proposed Additional Note 4A.
Proposed Additional Note 4B contains a definition of ‘grape wine-based beverage’ which:
The effect of these definitional changes is that certain imported beverages which were previously subject to the WETA, will instead be subject to rates of customs duty equivalent to those applicable under the Excise Tariff Act.
Items 3–6 update the rate of duty payable to $69.16 per litre of alcohol content to reflect the bi‑annual indexation of excise and excise‑equivalent customs duty rates.
Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2434.
[1]. Matthew Thomas, Paula Pyburne and Kirsty Magarey, ‘Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 [No. 2]’, Bills Digest no. 180, 2008-09, Canberra 2009, http://www.aph.gov.au/library/pubs/bd/2008-09/09bd180.pdf.
[2]. Explanatory Memorandum, Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 [No. 2] and Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 [No. 2], p. 3.
[3]. Explanatory Memorandum, p. 4.
[4]. Item 2 of Schedule 2 defines ‘sugar’ as monosaccharide or disaccharide.
[5]. For example chilli or lime: Explanatory Memorandum, p. 11.
[6]. Explanatory Memorandum, p. 15.
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