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Government Affairs

Distilled Spirits Industry Council of Australia Inc

Government Affairs

DSICA Submissions
Commonwealth Government
State and Territory Governments

•	Pre-Budget Submission 2002–03 Feb 2002
•	Submission to the Fuel Taxation Inquiry Oct 2001
•	Public Comment on World Trade Organisation (WTO) Related Issues – Fourth Round WTO Ministerial Conference – Qatar June 2001
•	Submission to the House of Representatives Standing Committee on Family and Community Affairs – Inquiry into Substance Abuse in Australian Communities April 2001
•	Submission to the Productivity Commission on the Review of Australia’s General Tariff Arrangements Feb 2000

SUBMISSION TO THE FUEL TAXATION INQUIRY
Why is DSICA Lodging a Submission to this Inquiry?
The Government’s revenue raising objectives in respect to the taxation of fuel are equally applicable to the other excise product categories, which include spirits. The associated administrative arrangements exercised by Customs and the ATO in relation to fuel also impact equally on the spirits industry. This is because the production of spirits and ready-to-drink (RTD) alcohol products which contain spirits is subject to excise.
   DSICA seeks input to the inquiry to ensure that any cost savings or administrative benefits which flow to the fuel industry as a result of the inquiry’s recommendations should, where practicable, be equally available to the spirits industry.
  DSICA’s latest estimate is that in 2000/01, Commonwealth revenue from spirits and RTD alcohol products (which are subject to excise) comprised approximately $1.3 billion. DSICA estimates that this consisted of $235 million in excise duty and $1.06 billion in customs duty. DSICA considers that its lengthy experience and involvement in excise policy and administration matters enables it to provide constructive input to the inquiry.
   Policy decisions relating to the legislative and administrative processes governing the importation and exportation of goods have a material effect on the costs and efficiencies of compliance imposed upon DSICA members. Duplication and differing requirements imposed by Commonwealth agencies on ostensibly the same goods (depending upon whether locally manufactured or imported), creates confusion and uncertainty in achieving effective compliance outcomes.
   DSICA members are in a relatively unique position in that the goods they import, including bulk spirits, are subject to compliance regimes, imposed by both Customs and the ATO. Any review of current regulatory processes needs to recognise the detrimental impact created by this dual jurisdiction.
DSICA is concerned to ensure that the needs of its members are examined and considered when the inquiry is formulating recommendations on excise administration arrangements for the fuel sector. DSICA would not support a situation where one excisable industry obtained benefits of an administrative nature, without similar benefits being available to another key industry, such as the spirits industry, which is also currently subject to the dual jurisdictions of both Customs and the ATO.

Executive Summary
1.1 Recommendations
Interaction of customs and excise administration arrangements (see section 4)

•	That the Australian Taxation Office (ATO) should be the single government agency responsible for the collection of revenue and the administrative arrangements relating to ‘excise equivalent goods’, such as imported spirits and imported ready-to-drink (RTD) alcohol products;
•	That generic government licensing issued by the ATO should replace multiple licences now required by both the ATO and the Australian Customs Service (Customs);
•	That entity licensing should be introduced under which a single licence is sufficient for an entire distribution network;
•	That Customs should continue to have responsibility for the border management aspects relating to the importation of excise equivalent goods;
•	That there should be appropriate alignment and linkages between relevant electronic and business systems in Customs and the ATO to facilitate increased effectiveness of the administrative processes imposed on industry;
•	That streaming of revenue payments on an estimated basis with deferred reconciliation and acquittal should be examined;
Alcohol taxation inquiry (see section 6)
•	That a comprehensive inquiry into Australia’s alcohol taxation system should be conducted in 2002/03 to examine whether the appropriate level of Commonwealth taxation is being applied to each of the major categories of alcohol;
Freeze on indexation of spirits excise duty rate (see sections 7 and 8)
•	DSICA recommends two alternative options for a one or a three year freeze on indexation of spirits excise, as set out below:
•	Option 1: that indexation of spirits and brandy excise rates be frozen for one year (until 1 February 2003), whilst a comprehensive alcohol tax inquiry is undertaken (beer and RTD excise rates would continue to be indexed);
•	Option 2: that indexation of spirits excise rates be frozen for three years (until 1 August 2004), whilst a comprehensive alcohol tax inquiry is undertaken; that brandy excise rates would continue to be indexed, until the brandy rate was fully aligned with the spirits rate, with effect from 1 August 2004, (beer and RTD excise rates would continue to be indexed).

DSICA’s full submission can be found at the Fuel Tax Inquiry website

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