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Wineries toast tax rebate
1 Sep 2004
Small wine producers will celebrate today after the Senate passed a tax rebate, to take effect from October 1. The new rebate, announced in the May Budget, exempts the first $1million of each producer's domestic wine sales from the 29 per cent wine equalisation tax. This amounts effectively to a rebate of up to $290,00 annually and means about 90 per cent of producers will escape WET altogether.
The move will cost $338 million over the next four years, offset by about $36 million in the removal of accelerated depreciation from grapevine plantings.
The new rebate does not resolve debate about an additional cellar-door rebate for wineries with more than $1 million in sales. They claim they're disadvantaged, but further negotiations are expected between state and federal governments.
New Zealand has objected to the new rebate and says it breaches CER and WTO rules. The Winemakers' Federation of Australia says this issue has to be worked out between governments.
Australian Financial Review, 1/9/04.
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