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Wine industry backs final draft of industry taxation changes

The Federal Government is unlikely to face any resistance to the final version of reforms to the wine industry's complex and generous taxation scheme, the Wine Equalisation Tax (WET) rebate.

Unlike beer and spirits, which are taxed based on the amount of alcohol per litre they contain, domestically produced wine, cider, mead, sake and 'fruit wine' are all taxed at 30 per cent of their wholesale value, called the WET.

The WET rebate scheme allows winemakers to claim a rebate of up to $500,000 on the tax they have paid, but that is all set to change now the Government's final draft of reforms has been released for a final review. Assistant Agriculture Minister Anne Ruston said the current scheme was being widely rorted and eligibility requirements needed to be tightened.

For years, the wine industry has begged the Government to tighten up the scheme, saying multinational companies were rorting it by claiming the rebate on bulk wine they traded, and by buying bulk wine, selling it under a range of labels, and claiming the rebate on each of them.

"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," Ms Ruston said.

"We were seeing some very significant downward pressure on the price of wine grapes and wine, and we were also seeing a focus on the domestic market when we know the Australian wine industry is at its best when it's exporting."

Public comment on the draft legislation can be made at the Treasury website and closes on 28 April 2017.

(From ABC Rural - 10 April 2017)