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Drinkers Should Prepare For Tax Hikes

Media Statement
Monday 19 April


Consumers are being warned to brace themselves for upcoming tax hikes on their favourite alcohol beverages, following the Consumers Price Index (CPI) inflation figures, announced today (Monday 19 April).

Today’s release of figures allows the Distilled Spirits Association* to calculate the expected tax increase that will be imposed on spirits drinkers from 1 June. Excise tax on sprits and other alcohol beverages, indexed to annual inflation, is set to increase by 1.55%.

This means more than $19, will go to the Government in the form of excise tax, GST and special levies on an average bottle of spirits. Illogically, spirits are already taxed at twice the rate of beer and wine.

“Every year Kiwi drinkers are walloped by tax hikes, making their favourite drinks more and more expensive,” says Thomas Chin, chief executive of the Distilled Spirits Association.

Thomas Chin argues that this year’s tax increases on the liquor industry are unjustified, given the Government’s surplus.

“With their coffers in the black, that means that there’s simply no need to proceed with any tax hikes. The Government’s continued thirst for revenue and constant tax increases already amount to more than $170m annually, surely it can afford to give Kiwis a break by not stinging them for more.

Thomas Chin says that there are strong arguments for maintaining tax stability.
“It’s good for lower and middle working class New Zealanders, business and the economy. By not increasing the cost of alcohol beverages, sales would be more certain, and that translates into better returns for crown accounts.”
Last year’s increases saw the introduction of the infamous “sherry tax” which saw the elderly, among others, severely disadvantaged, forcing many to give up their favourite tipple.

We urge Finance Minister Michael Cullen to give drinkers a break in next month’s budget (27 May) by deferring this year’s planned take increase.

“The thought of these tax hikes is scary enough to make you cry into your glass.”


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