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That extra euro on a bottle of wine has raised €45 million in taxes

The Irish Wine Association says the tax is disproportionate and excessive, and wants it reversed in the upcoming Budget.

Image: wine via Shutterstock

REMEMBER THAT EXTRA euro Minister Noonan placed on a bottle of wine in last year’s Budget?

The steep tax rise garnered plenty of attention when it was announced last December, with representative body the Irish Wine Association calling it “disproportionate, excessive” and contrary to the Governments’ “stated aim to support small business”.

Well, we now know how much has been raised in taxes for the State as a result of the measure: the Department of Finance has confirmed €45 million was brought in by the levy between January and the end of August.

Minister Noonan revealed the figure in an answer to a parliamentary question from Fine Gael TD Brendan Griffin. Speaking to TheJournal.ie, the Kerry South deputy said he had been curious as to how much the measure had raised, and that he welcomed the figure:

“Anything we can do to bring in extra revenue that means we aren’t having to be cutting, for example, services for older people, is to be welcomed,” Griffin said.

Asked whether he would support a further increase in the tax, he said said that “everything should be considered” in the run up to the Budget, but that there was a danger that if another rise was brought in “you might be into diminishing returns”.

Griffin added that “not one person” in his constituency had been in contact with him to complain about the tax since it was brought in.

Excise on wine brought in around €231 million in both 2011 and 2012, according to Department of Finance figures. The take for the first nine months of this year was at €174.8 million; the expected boost in trade in the run up to December is likely to bring the final figure well above the €231 million figure by the end of the year.

Competitiveness

The IWA is reiterating its call on the Government to reverse the measure, which it says is “challenging Ireland’s competitiveness as a tourism destination”.

Chairman of the body, Michael Foley said: “Ireland has the highest levels of excise in the EU and as a result is one of the most expensive countries to purchase wine.

“This clearly increases the risk of expediting cross-border shopping, which has a huge impact on the overall Irish retail sector.

“In basic terms, if we look at a standard €8 bottle of wine, a massive 53 per cent of this price is attributable to tax (excise & VAT).”

Corresponding VAT rates were not released by the Department, which said that “VAT returns do not require the yield from a particular sector or sub-sector of trade to be identified”. However, the IWA puts the overall VAT figure for wine for last year at €251 million.

Read: Diegeo defends Arthur’s Day, saying its a music festival and celebration of the pub >

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About the author:

Daragh Brophy

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