spiritsNEWS January 2017

After a 71% excise tax increase on spirits, the end result is a loss for Belgium

In November 2015, the Belgian Government decided to raise excise tax on alcohol beverages, reinforcing the discrimination against spirits.  Excise tax was raised on spirits by 41% (making it +71% since 2013) compared to beer (+17% since 2013) and wine (+ 59% since 2013).  Through this increase, the expectation was an extra €220 million.  However, the result at the end of the first year: only an extra €51 million was collected instead of the €220m expected.  Moreover, because of increased cross border shopping, Belgium lost €73 million in VAT.  This means a net loss of €22 million to the Belgian exchequer compared with 2015.

The damage does not just affect spirits producers and the employment in the sector.  Retailers and other producers are also suffering because it is now the entire shopping list that is purchased outside the borders of the Belgium Kingdom.  The Government had been warned repeatedly about this likely outcome but nothing was changed.  Let’s be clear, this increase was not justified by health purposes and the decrease we call for should not be blocked for the same reason.  A decrease will not lead to extra consumption (nor would the increase lead to a decrease in consumption) but it would bring consumers back to Belgium.

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