MOVES to try and remove rorting from the wine equalisation tax (WET) rebate have taken another step forward.
Revenue and Financial Services Minister Kelly O’Dwyer and Assistant Agriculture and Water Resources Minister Anne Ruston have now released exposure draft legislation to reform the WET and address some of the systems failings.
The draft legislation and explanatory material has been released on the Treasury website and industry has been invited to make submissions to the process, which is set to close on April 28.
Minister O’Dwyer said the government was delivering on its commitment to the Australian wine industry by ensuring the rebate was targeted to wine producers who build brands, invest in regional communities and create local jobs.
“These reforms are the result of industry calling for action to address distortions in the market through the misuse and exploitation of the rebate,” she said.
From July 1 next year eligible producers will be required to own at least 85 per cent of the grapes used to make wine throughout the winemaking process, the ministers said in a statement.
The rebate will be limited to wine branded with a registered trademark, and in certain cases to wine branded with a common law trademark.
The rebate will also be limited to wine packaged in a container not exceeding five litres for domestic retail sale.
There will be arrangements to allow cider and perry products packaged in up to 51 litre kegs to access the rebate.
This will accommodate common industry practices for sales on tap in restaurants and pubs.
In addition, wine producers will need to better link their rebate claims to the wine tax being paid.
The WET rebate cap will also be reduced from $500,000 to $350,000 effective from July 1, 2018.
Senator Ruston said the changes, along with the new $100,000 Wine Tourism and Cellar Door grant, would ensure that the Australian wine industry continued to deliver economic and social benefits in their regions.
The Winemakers’ Federation of Australia (WFA) welcomed the release of the exposure draft legislation saying the industry had fought long and hard to reform the WET rebate eligibility criteria.
WFA Chief Executive Tony Battaglene said the WET reforms announced last year had gone a long way to restoring integrity in the tax system.
He said once implemented, the reforms would allow “this very important sector to continue to grow and deliver benefits to rural and regional Australia”.
“We are delighted the government has recognised the importance of the wine sector to Australia,” he said.
“The WET legislation recognises the unique and valuable role the wine sector plays in the Australian economy.
“The legislative changes improve the integrity of the system and are vital to the success of the wine sector and its profitability.
“Our contribution to regional Australia and exports through wine producers who build brands, invest in regional communities and create local jobs is significant.
“Once implemented the legislative changes will put an end to uncertainty and put the industry in a stronger long-term position.”
WFA said the bedding down of these changes, along with the new $100,000 Wine Tourism and Cellar Door grant, and the $50 million Export and Regional Support Package, would ensure the Australian wine industry continued to deliver economic and social benefits in their regions.