The Government plans to implement a number of additional measures as part of its revenue raising strategy. The key changes include an increase in the tobacco excise, a reduction of the wine equalisation tax rebate cap and an extension of the excise refund scheme to domestic distillers.
Increase in the tobacco excise
The Government plans to increase the tobacco excise and equivalent customs duties through four annual increases of 12.5% per year from 2017 until 2020. These increases will occur on 1 September each year, and be in addition to existing indexation to average weekly ordinary time earnings.
From 1 July 2017, the Government will also limit the duty free tobacco allowance to 25 cigarettes or equivalent, from the current allowance of 50 cigarettes.
Reduction of the wine equalisation tax rebate cap
The Government plans to reduce the wine equalisation tax rebate cap as follows:
- from $500,000 to $350,000 on 1 July 2017; and
- from $350,000 to $290,000 on 1 July 2018.
The Government will also introduce tightened eligibility criteria which will apply from 1 July 2019. Under the tightened eligibility criteria, a wine producer must own a winery, or have a long term lease over a winery, and sell packaged, branded wine domestically.
Extension of excise refund scheme for distillers
The Government plans to extend the current brewery refund scheme to domestic distilleries and producers of low strength fermented beverages, such as non-traditional cider. This is to be implemented from 1 July 2017.
The scheme is not intended to extend to alcopops or wine producers.