The National Off-Licence Association: Excise Duty Reduction Will Bring More Jobs and Better Salaries
A communicate released today 12th of June by the National Off-Licence Association (NOffLA) as part of its Budget 2017 pre-budget submission to the Department of Finance shows that a reduction in tax on alcohol of just 10c on spirits/beer/cider and 50c per bottle of wine in Budget 2017, would lead to 54% of businesses taking on more staff and 62% increasing salaries.
NOffLA also released the results of its 2016 member’s survey which shows that an increase on excise for Budget 2017 would jeopardise thousands of jobs and make 55% of off-licenses in Ireland struggle to stay open. Contrastingly, if a reduction was approved instead, 81% of respondents would re-invest in their business by increasing product quality and range.
The independent off-licence industry has lost 3,000 jobs since 2008 and NOffLA urges the Government to protect the remaining 5,900. NOffLA’s statement calls on the Government to:
1. Reverse the Budget 2014 excise increases on alcohol as Ireland has the highest excise on wine in the EU and the third highest tax on beer and spirits. As a result of these taxes, Ireland is only behind Finland, Sweden and the UK in having the highest taxes on alcohol in the EU.
2. Restore parity to wine taxation in relation to domestic alcohol as the excise on a bottle of wine is on average 35% higher than the equivalent excise on cider and beer.
3. Reintroduce a ban on the below cost selling of alcohol. The prohibition of the retailing of alcohol at below invoice cost price will ensure that retailers cannot reclaim 23% of the loss in their VAT return; saving the State an average of €24 million each year as well as ensuring alcohol is retailed in a responsible manner.
4. Establish tighter control on out-of-state imports in terms of VAT and excise collection thus ensuring out-of-state and online retailers cannot sell directly to Irish consumers without paying the required tax and VAT. Such controls will ensure online retailers are fit for purpose; tax compliant; and meet the same licencing obligations as domestic retailers.
The 2016 NOffLA Members Survey found that 41% of respondents reported a decline in turnover in 2015. If excise is increased again in Budget 2017, 54% would struggle to remain open and 55%would reduce staff while 38% would be forced to reduce staff salaries.
Since 2012, 73% reported reduced sales volumes and 45% blame excise increases while 33% points out a lack of legislation as the primary cause. A ban of below cost selling is hailed by 70% of respondents as a solution to heavy and irresponsible discounting of alcohol.
Evelyn Jones, Government Affairs Director NOffLA called on the new Government to take positive and decisive action that will safeguard jobs, encourage local investment and ultimately contribute to the development of local communities. A reversal of the punitive Budget 2014 excise increase on alcohol combined with a reduction of the tax on wine, which is significantly higher than that of cider and beer, would facilitate business and indeed consumer choice.
The organisation also calls on the enactment of the Public Health (Alcohol) Bill in its entirety and as such reintroduce the ban on below cost selling of alcohol which costs the taxpayer €24 million annually. Also, the creation of tighter controls on out-of-state online retailers should be introduced, the argue, to promote higher levels of responsible retailing thus protecting the general public, alcohol consumers and retailers.