Australia’s beer tax rules could soon undergo significant changes, potentially leading to higher prices for beverages like seltzers, ginger beers, and lagers.
The Australian Taxation Office (ATO) is considering redefining the term “beer,” a move that could see many brewed alcoholic drinks being taxed at a higher rate. Currently, alcoholic beverages face stricter taxation compared to brewed drinks, a policy aimed at promoting the consumption of lower-alcohol beer.
Under the ATO’s proposed changes, drinks that fall outside the traditional definition of “beer” could see substantial price increases in pubs and other venues. Beer enjoys a unique taxation structure, where the first 1.15% of alcohol by volume is exempt from excise tax.
The ATO currently defines “beer” as a beverage that is brewed and “is the product of the yeast fermentation of an aqueous extract of predominantly malted or unmalted cereals, but may also contain other sources of carbohydrates.” If the definition changes, more alcoholic drinks could be excluded from this category, facing higher tax rates as a result.
