spiritsNEWS May 2016

Greece is thinking of raising excise tax on alcohol again

Excessive taxation on spirits has been proved to be one of the most inefficient political options of the past, preventing the return of an economy to growth.  The 125% increase over 4 successive policy changes has not yielded the anticipated public revenue, as the optimum tax rate that maximises public revenues has long been exceeded.  It has instead fuelled smuggling, and strengthened the black economy, tax evasion and delinquent behaviour in general.  Legal spirits sales have recorded a steep decline of -45.7% and in four years, excise tax revenues from spirits contracted from €348.76m in 2011 to €272.4m in 2015, having reached now the lowest level in six years. 

 

These changes in taxation have led to the contraction of the industry and have reduced the competitiveness of Greek tourism, in turn increasing unemployment.  Planning further increases in a further vain attempt to generate more revenues will not work and will instead intensify the aforementioned negative effects.

 

Our Greek producers are strongly advocating a gradual de-escalation of the excise rate over a three-year period that would drive growth and create jobs while unlocking productive investments with the ultimate benefit of growing public revenues.  It is currently happening in the UK, why not in Greece?

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