77.
Secondly, I propose to increase the basic rates for imported ethyl alcohol and methyl alcohol from $4.30 to $4.55 litre. This will maintain the rates in real terms, and keep them in line with the rates for non-European type wines.
78.
Thirdly, I propose to lower the differential on duty rates which exists at present between, on the one hand, brandy and, on the other, whisky, gin, liqueurs, rum, vodka and other spirituous liquors. I propose to reduce the specific duty rate on brandy by $12 per litre, that is from $67 to $55 per litre, whilst leaving the others at the existing specific duty rate of $48 per litre. However, to protect the real revenue yield, I propose to increase the ad valorem rates for all these liquors from 20% to 30%.
This proposal is consistent with my predecessor's view that a purchaser of a cheaper brand should not be required to pay the same duty per bottle as a purchaser of a more expensive brand (32). The effect of
of lowering the differential between the duty rates imposed on brandy and whisky will mean that the duty on the cheaper brandies will be reduced by some 12.5%, that is $9 per litre, whereas there will be modest rise in the duty on the cheaper whiskies. More expensive brandies and whiskies will attract more duty. Details of these new rates are given in an Appendix to the printed version of this Speech (33). No changes are proposed to existing duty rates for champagne, and sparkling or still wines.
79.
a
All these changes in rates are effective this afternoon. I estimate the additional revenue yield
revenue yield in 1988-89 to be $40 million assuming no consumer resistance.
(32) 1984 Budget Speech, paragraphs 103-109.
(33) Appendix F(1).
/Tobacco
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