Thursday, September 24, 2009

Does double the licence fee double tax income?

It is this time of the year again - renewal of the licence. Now, I do not want to bore people with administrative details from the wine trade, however, this detail is yet another example how the drive for taxes and new income by the government can back fire and actually reduce state income.
Up to this year a wine off licence cost € 250.00 per year. This fee was doubled probably thinking that it will double the income from licences. But small outlets such as health food shops, farm shops and the like who kept a small selection of quality wines decided that the cost is too much for the turnover they made and will not renew their licence.
It is like with the increase of VAT by half a percent and the fifty cents per bottle in excise duty, wine is getting more and more expensive and people go North where they can buy wine much cheaper. It means less tax income at the end of the day and business going north and not remaining local. Money is leaving an already cash strapped economy. It pushes small businesses out and at the end of the day only big shops are left.
Does it at least reduce the problem with binge drinking and other socially unacceptable behaviour related to alcohol? Question: is wine the preferred drink to get really loaded? This increase is once again a shot from the hip and clearly missing its target!

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