Wine Equalisation Tax (WET)

The Wine Equalization Tax (WET) is a tax on the value of wine, determined on the basis of the last wholesale price. This is a value based tax, unlike the excise applied to beer and spirits which is determined on the alcohol content of the product and subject to different rates for different types of product.

The WET is budgeted to raise $990 million in 2018-19 and $3.96 billion over the forward estimates. It is our fifteenth largest tax.

WET represents 0.2% of all Commonwealth revenue in 2018-19, and 0.05% of GDP.

WET is currently (March 2018) levied at the rate of 29% on the wholesale price of the wine. WET is not indexed as the tax is proportional to the price of the wine, which increases over time. GST of 10% is applied on top of the WET. There is a rebate of the WET for small wine producers, capped at $350,000 per annum.

You can choose:

• the rate of the WET
• to change the cap for the small producer rebate
• to replace the WET with an excise based on the alcohol volume of wine, as is the case for beer and spirits. In this case you can select a method for indexing the excise rate
• to apply an additional rate of indexation to wine as has been applied to tobacco.

The model does not take account of the impact of changes to WET on GST (a reduction in the WET or equivalent excise rate would lower GST collections, and an increase would also increase GST collections), nor of any other second round effects.

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