House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Wayne Swan MP and the Minister for Home Affairs, the Hon Bob Debus MP)

General outline and financial impact

Increased tax on certain alcoholic beverages

These two Bills amend the Excise Tariff Act 1921 and the Customs Tariff Act 1995 to increase the excise and excise-equivalent customs duty rate applying to certain alcoholic beverages not exceeding 10 per cent by volume of alcohol from $39.36 per litre of alcohol content to $66.67 per litre of alcohol content.

The Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 and the Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 were originally passed by the House of Representatives on 25 February 2009 but were negatived by the Senate on 18 March 2009.

Date of effect: 27 April 2008.

Proposal announced: On 26 April 2008, excise and customs notices were published in the Commonwealth Government Special Notices Gazette No. S87 and No. S88, respectively.

Financial impact: These measures will have the following revenue implications:

These revenue impacts include the following estimated increased goods and services tax collections:

Compliance cost impact: Transitional compliance and administration costs are expected to be minor if the rate change becomes law.

Changes to the definition of beer and grape wine product

The amendments to the Excise Tariff Act 1921 and the Customs Tariff Act 1995 alter the definition of 'beer' and further amendments to the Customs Tariff Act 1995 alter the definition of 'grape wine product'.

Date of effect: 1 July 2009.

Proposal announced: On 25 February 2009, the Minister for Health and Ageing tabled amendments to the taxation definitions of beer and grape wine product in the House of Representatives.

Financial impact: The amendments will have the following revenue implications:

Compliance cost impact: The change to the beer and wine definitions will cause minor transitional compliance and administration costs.