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New tax rates a welcome relief for craft beer brewers

New tax rates a welcome relief for craft beer brewers

Leonie Ferretter & Jessie Zhang examine the updated excise duty rates on beer in Australia.

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Leonie Ferretter

Partner, Trade & Customs

KPMG Australia

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Australia’s alcohol tax regime has updated the excise duty rates on beer. Excise duty is applicable to excisable goods, being alcohol, tobacco and fuel, manufactured and sold in Australia.

From 1 July 2019, beer packaged in kegs between 8 and 48 litres is subject to the same rate of duty as beer packaged in the standard keg size of 48 litres. Additionally, all eligible alcohol manufacturers may claim a refund of 60 percent of excise duty paid within a twelve month period to a maximum of $100,000. The previous cap was $30,000.

Prior to the change in duty rates, beer sold in kegs exceeding 48 litres was taxed at a lower rate than beer sold in smaller kegs. In May of 2018, the then Treasurer Scott Morrison, noted that the change was expected to provide small and microbrewers of beer a greater chance of remaining competitive against their global and sector-dominating counterparts, due to the fact that craft and microbrewers generally use smaller kegs in their production.

Australia’s Independent Brewers Association (IBA) welcomed the changes, with IBA Chair Jamie Cook stating that:

“the increase to the excise refund cap will offer independent brewers with up to $70,000 more in capital which they can use on people, plant and equipment and also breaking into the market.” 

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