Small craft brewers and distilleries are expected to benefit from tax breaks of $ 225 million starting July.
A plan to “support jobs” in the sector will raise the cap on excise duty reimbursement for small breweries and distilleries from $ 100,000 to $ 350,000 per year, Treasurer Josh Frydenberg and Assistant Treasurer Michael Sukkar said in a joint statement on Saturday.
Eligible brewers and distillers will also receive a 100% refund of the excise tax they have paid in lieu of the current 60% refund up to a cap of $ 100,000.
Drew Fairchild, Co-Founder and General Manager of Top Shelf International, welcomes the government’s announcement that it will “undoubtedly” make a difference to businesses in the sector.
“Increasing the excise tax relief to $ 350,000 will undoubtedly make a difference in helping any business looking to offer great Australian products,” Fairchild told SmartCompany.
There are around 600 brewers and 400 distilleries in Australia, two-thirds of which operate in rural and regional areas.
The tax cuts are designed to help these brewers and distillers invest in and grow their businesses, which employ a total of around 15,000 Australians.
Fairchild, whose ASX-listed company produces whiskey and vodka and is about to launch a tequila-like spirit, says the substantial surge in tax refunds will help Australian distillers expand their exports internationally.
“At Top Shelf, we look to the winemaking industry’s success in building export markets and have little doubt that Australia can build an international export industry with continued spirits tax reform,” said Fairchild.
“We have the knowledge, expertise and demonstrated ability. This is a welcome next step in allowing reinvestment to make that goal a reality.”
In Australia, the excise tax is a tax on alcohol, tobacco, fuel and petroleum products.
Excise alcohol products, including beer, spirits and other excise beverages, are subject to excise duty if they are manufactured or manufactured in the country.
The Australian distillation industry has been campaigning for the government for some time to reduce excise taxes, which can be as high as 57% of the retail cost of a bottle of liquor.
According to the companies, this is holding back the growth of the sector and preventing spirits from becoming a successful Australian export product like wine.
Eligible small breweries and distilleries will automatically receive the new excise tax refunds when filing excise tax returns from July 1st.