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No changes in alcohol duty
The simple ad valorem duty system introduced last year to achieve greater equity between imported and locally manufactured alcohol products, and between high and low value products of the same category had been generally successful.
This was stated by the Financial Secretary, the Hon Sir Hamish Macleod, today (Wednesday) in the Legislative Council.
"The ordinary consumer has benefited considerably from the effects of greater competition at the lower end of the market, with greater choice and cheaper products now available.
"Such are the benefits of an ad valorem system. I do not propose therefore any change in the basic system," he said.
As for a proposal to apply a "cap" to the duty payable on the more expensive products, Sir Hamish said he was not entirely lacking in sympathy with this suggestion, given that at the higher end, the duty had undoubtedly increased.
"But whilst my heart, and my palate, urge sympathy, my intellect tells me to make no such change.
"These are early days to assess fully the impact of the system, but there is no evidence yet to suggest that the new system has resulted in reduced revenue yields at this upper end of the market, though there has been a drop in dutiable quantities.
"To apply a cap would also undermine the logic of the new system which is based on the simple principle of vertical equity.
"I have had to conclude that such a cap is not justified. But we will undertake to review the situation again in the light of revenue yields over a longer period," he said.
End/Wednesday, March 1, 1995