The Australian government is set to be given the green light to reform taxation in the country's wine industry.
New legislation, known as the Wine Equalisation Tax (WET) rebate, is set to see taxation for wine remain at a significantly lower rate than that levied on beer and spirits.
Whereas other types of drinks are taxed depending on the amount of alcohol they contain, wine is set at a flat rate of 30 per cent of its wholesale value. The current scheme enables winemakers to claim rebates, which can run into the hundreds of thousands on the tax which they have paid.
However, this is set to change under the new government regulation that is soon to become law.
The move is set to target large companies who buy and sell wine in bulk. Under the current system, companies are able to bulk-buy wine and claim the rebate on it, before selling it under a different brand - once again claiming tax back on it, despite the fact that they have done so the first time around.
Anne Ruston, the assistant Agriculture Minister, has said that local, small-batch winemakers have been begging the government to tighten up the system for many years.
"The WET rebate was being accessed in a manner in which it wasn't originally intended, which was actually creating some very perverse distortions in the marketplace," she stated.
The primary amendment to the law will require winemakers to own the 'source product'. They must also own 85 per cent of the final product to be able to claim the rebate.
Ms Ruston welcomed the new move, saying: "In the past, it's been unclear about who's eligible, but the ATO will new require you to have paid the tax to claim it back."
