Call to scrap booze tax as hospitality reopens

The New Zealand Taxpayers’ Union is calling on the Government to support the hospitality sector with a temporary suspension of alcohol excise tax paid by bars and restaurants. A petition has been launched at www.taxpayers.org.nz/happy

Union spokesman Louis Houlbrooke says, “The hospitality sector has been hammered by COVID-19 lockdowns and deserves support to bounce back. Now that Auckland bars and restaurants are back in business, the Government should kick off the summer with an immediate commitment to refund or eliminate all alcohol excise paid by hospitality operators for the next few months.”

“Aucklanders have been stuck getting drinks delivered from off-licences for 100 days now. Discounted drinks at bars and restaurants would get New Zealanders out to support the establishments we’ve been cheating on during lockdown. And many of us will stick around to pay for meals and pub snacks.”

“Even for a revenue-hungry government, temporary suspension of excise at on-license venues would be a highly affordable COVID response measure. Even if we eliminate the excise tax for 12 months, the $168 million* in lost revenue would equal just 0.24% of Grant Robertson’s $69 billion COVID response fund.”

“This idea is an economic no-brainer and a political winner. New Zealanders love happy hour. Let’s make it last all summer.”

The elimination of alcohol excise would result in:

• $0.77 off a 500ml handle of 5% beer.
• $2.73 off a 1.8L jug of beer.
• $0.58 off a 187.5ml glass of 13% wine.
• $2.33 off a bottle of wine.**

*Estimate based on $1.2 billion in total annual alcohol excise tax, of which 14% comes from on-licenses.

**Figures are based purely on the elimination of excise tax. If the Government also chose to refund the GST that is charged on the excise, savings would be greater.