Tax on alcohol in Ireland compared to other countries

Flex

Hi, checked with the mods to post this here. The past year or two Ive been getting more and more into trying out whiskeys (and whiskys!), along with some of the beers from newer breweries opening around the country and have been really enjoying it. Midleton Rare and Jameson 18 year old being two major favourites! Had a Glenmorangie 18 YO too that was great. Also been reading into the history of distilleries and breweries in Ireland and how there were hundreds and hundreds pre-famine, how Irish Whiskey was 50 times bigger than Scotch Whisky, but how those distilleries and breweries gradually fell in number to only a handful in recent years, but are starting to spring up around the country again. I think this is great, beer and whiskey are two things that historically (I think) we were world class at, and could be again. Jameson, Bushmills, Tullamore Dew and so on are all doing great across the world now, for example

What has really annoyed me as of late, however, is the level of tax on these (and wine too, of course) here compared to other countries. Some facts on it;

• After the two duty increases in budgets 2013 and 2014, about ~65% of the price of drinks in a super market is tax.
• A bottle of whiskey and I presume a tray of beer that costs €28 is composed of about €13 of actual charges from the supplier and super market and then €15 of tax.
• Our taxes are the highest in Europe for wine and either top or 2nd for beer and spirits. Id always been aware that taxes were high on alcohol here, but was unaware of just how high they actually were

As I said, Ive been a bit annoyed upon finding out the actual levels and also because brewing and distilling is something I think could be an actual strong indigenous industry with huge export potential (perhaps somewhat reducing our major reliance on foreign MNCs for exports), yet the governments reaction to this is to tax it over and over.

Wanted to ask other folks who enjoy having a drink, why is it seemingly never brought up, especially since there were two increases in past years? Is it seen as a necessary evil, or something people could accept temporarily given the state of the deficit, or are people unaware just how high the tax component of costs are? Or is it something people have brought up with TDs?


Thanks

BeerNut

Flex wrote: »

why is it seemingly never brought up

It's brought up all the time. The pubs even ran a nationwide "duty free day" last month to demonstrate how much of a drink goes in tax. Stories like this are never out of the drinks news.

the beer revolu

Alcohol for export doesn't attract the same duty as alcohol for domestic consumption, explaining why you can buy Irish whiskey cheaper almost anywhere than Ireland.

munchkin_utd

if people in Ireland were prepared to pay higher income taxes, then you wouldnt need to charge so much on alcohol or (pre2008) motor tax to make up the difference to pay for free goddamn everything else.

Flex

BeerNut wrote: »

It's brought up all the time. The pubs even ran a nationwide "duty free day" last month to demonstrate how much of a drink goes in tax. Stories like this are never out of the drinks news.

Thanks for that, that's interesting. The only group Ive ever heard of about tax on alcohol is one called Support Your Local. Its great theres some work going towards it, but its not anything that the government seem to get much hassle over, people just seem to accept it, apart from a brief period in 2010 (I think) when cross border shopping was a hot issue. Is it just seen as a necessary evil to support the deficit, for example?

the beer revolu wrote: »

Alcohol for export doesn't attract the same duty as alcohol for domestic consumption, explaining why you can buy Irish whiskey cheaper almost anywhere than Ireland.

That's kinda of my point, we get fleeced with duty here. As mentioned, I had always heard how taxes were high, but I didn't realise they account for well over half the price

munchkin_utd

Flex wrote: »

<snip>
That's kinda of my point, we get fleeced with duty here. As mentioned, I had always heard how taxes were high, but I didn't realise they account for well over half the price

I'd argue you can well afford it, and its just a balancing of tax matters rather than a fleecing.

For the average industrial wage of 32grand, youve about 6000 euro more in your pocket due to the lower personal taxes in Ireland than say germany.
(even on 17grand, youve 4grand extra in your pocket in Ireland than germany)

Now, personally I'd take the six grand in my pocket and pay a euro here or there more for booze to be honest!
(and the way things are shaping, it mightnt be that far down the road.)

Flex

munchkin_utd wrote: »

I'd argue you can well afford it, and its just a balancing of tax matters rather than a fleecing.

For the average industrial wage of 32grand, youve about 6000 euro more in your pocket due to the lower personal taxes in Ireland than say germany.
(even on 17grand, youve 4grand extra in your pocket in Ireland than germany)

Now, personally I'd take the six grand in my pocket and pay a euro here or there more for booze to be honest!
(and the way things are shaping, it mightnt be that far down the road.)

I was talking about taxation on alcohol in Ireland versus other countries and why people are so passive in Ireland over it, so had wanted to avoid the Economy forum type stuff.

Anyway, I recall that total government expenditure in Germany being higher than Ireland. Table in the link below is all I could come up with on google in my hurry. Prior to the economic crash when government spending as a % of GDP jumped considerably in Ireland, Irelands government spending was in the ~35% region, whereas Germanys was in the ~45% region, meaning people would be required to pay higher income taxes to avail of that higher spending on public services/social welfare, which (having been to Germany a number of times) I think is a fine trade off.

http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=tec00023

Since the economic crash Ireland's government spending as a % of GDP shot up, but has already dropped back below Germanys and is on a trajectory towards lower than 40% again. That's why one of the questions I asked earlier was were people willing to accept it temporarily during the downturn because of the state of the economy

drumswan

Brew your own, tax free then.

Geuze

Excise rates here:

http://www.revenue.ie/en/tax/excise/duties/excise-duty-rates.html

Geuze

The Revenue conduct cross-border price comparisons with NI:

http://www.revenue.ie/en/about/publications/cross-border-surveys/cross-border-comp-oct14.html

Geuze

Excise stats, last published for 2012:

http://www.revenue.ie/en/about/publications/statistical/2012/excise.pdf

Geuze

German PRSI = 20% approx

Irish PRSI = 4%

But German excise rates are lower.

Geuze

Flex wrote: »

As I said, Ive been a bit annoyed upon finding out the actual levels and also because brewing and distilling is something I think could be an actual strong indigenous industry with huge export potential (perhaps somewhat reducing our major reliance on foreign MNCs for exports), yet the governments reaction to this is to tax it over and over.

There are no taxes on exports.

So our high excise and VAT has no effect on exports.

PeterBrown1415

Geuze wrote: »

German PRSI = 20% approx

Irish PRSI = 4%

But German excise rates are lower.

What are German USC rates?

Geuze

Flex wrote: »

• After the two duty increases in budgets 2013 and 2014, about ~65% of the price of drinks in a super market is tax.
  

Beer duty is 22.55 per HL per % alcohol.

So that's 95c per litre per 4.2% beer, or 54c per pint.


Let's take a 5.00 euro pint in Dublin.

The 23% VAT is 93.5 cent, plus 54c duty = 147.5 tax.

The tax is 29.5% of the selling price.

Note that my example is a pub price, not a supermarket price.

Greyian

Geuze wrote: »

Beer duty is 22.55 per HL per % alcohol.

So that's 95c per litre per 4.2% beer, or 54c per pint.


Let's take a 5.00 euro pint in Dublin.

The 23% VAT is 93.5 cent, plus 54c duty = 147.5 tax.

The tax is 29.5% of the selling price.

In fairness, he did say in a supermarket.

So Tesco are doing 24 cans for €26 (I think it is) at the moment.

that would be 47.5c duty per can, and if each can is €1.08, that's ~20c of VAT per can. Add them up, you get ~67.5c of duty/VAT per can, which is 62.5%.

While pubs certainly charge exorbitant prices for alcohol in general, tax certainly is the single largest cost of alcohol in supermarkets (in general, some craft beers for example which can be €3+ per 500ml, wouldn't be as effected by the duty obviously).

Geuze

PeterBrown1415 wrote: »

What are German USC rates?

A single person on the average wage pays the following in direct taxes:

Germany = 49.1%
Irl = 26.6%

2013 data

See here:
http://www.oecd.org/germany/taxingwages-germany.htm


Direct taxes are lower in Ireland, but indirect are higher.

I was told by an Irish Distillers rep that the duty on a 700ml bottle of Jameson in supermarkets is €19. That is shockingly high if true.

Geuze

Deleted User wrote: »

I was told by an Irish Distillers rep that the duty on a 700ml bottle of Jameson in supermarkets is €19. That is shockingly high if true.

The great thing about the internet is we need no longer depend on hearsay, pub talk, etc.

The Revenue website is at our fingertips, with the excise data.


Here are the rates:
http://www.revenue.ie/en/tax/excise/duties/excise-duty-rates.html

Spirits duty is 42.57 per litre of alcohol.

Multiply by 0.7, and multiply by 0.4 gives us 11.92 per 70cl bottle at 40%.

So spirits excise duty is approx 60c per shot.

LeinsterDub

Geuze wrote: »

The great thing about the internet is we need no longer depend on hearsay, pub talk, etc.

The Revenue website is at our fingertips, with the excise data.


Here are the rates:
http://www.revenue.ie/en/tax/excise/duties/excise-duty-rates.html

Spirits duty is 42.57 per litre of alcohol.

Multiply by 0.7, and multiply by 0.4 gives us 11.92 per 70cl bottle at 40%.

So spirits excise duty is approx 60c per shot.

Perhaps they mispoke and meant tax, when you add in vat where do you get to?

LeinsterDub

LeinsterDub wrote: »

Perhaps they mispoke and meant tax, when you add in vat where do you get to?

Never said it was true. It is just hearsay, but I was told that €19 goes to the government on every bottle of 700ml Jameson we sell by a sales rep who still works for them whom I have no reason to disbelieve. At store level we have no information about this, not the sort of thing that head office likes to talk about!

BeerNut

Deleted User wrote: »

whom I have no reason to disbelieve

It's possible that he's trying to present his industry as a bastion of fair pricing, barely scraping by against an increasingly rapacious government, in the hope that his customers won't probe too deeply about how much profit Pernod Ricard makes from each bottle of Jameson and deem it excessive.

BeerNut

BeerNut wrote: »

It's possible that he's trying to present his industry as a bastion of fair pricing, barely scraping by against an increasingly rapacious government, in the hope that his customers won't probe too deeply about how much profit Pernod Ricard makes from each bottle of Jameson and deem it excessive.

Maybe, but we are just one store of one of the big multiples, he doesn't sell directly to us, and of course he could have been talking complete ****e but he's given me no reason to doubt him over the last few years.

Flex

Deleted User wrote: »

Maybe, but we are just one store of one of the big multiples, he doesn't sell directly to us, and of course he could have been talking complete ****e but he's given me no reason to doubt him over the last few years.

No, it sounds about right

60 cent per 35.5ml measure in a 700ml bottle is €11.83
Bottle of Jameson in Tesco is €29.25, so VAT at 23% is €6.73 of that
VAT+Excise is €18.55 of that €29.25, or 63% (feel free to correct my workings above if theyre incorrect!)

So if that is correct, of that €29.25 you pay the supplier and retailer actually only charge you €10.70, which seems low? Have I double counted the VAT and excise perhaps? I would guess its a similar percentage for beer and even higher for wine

the beer revolu

You haven't double counted duty and VAT.
The VAT is applied to the retail price which included the duty.
So, yes, we do pay VAT on duty.

the beer revolu

Geuze wrote: »

A single person on the average wage pays the following in direct taxes:

Germany = 49.1%
Irl = 26.6%

2013 data

See here:
http://www.oecd.org/germany/taxingwages-germany.htm


Direct taxes are lower in Ireland, but indirect are higher.

You can't go around saying stuff like that.
Everyone knows that Irish people pay the highest taxes in the world - both direct and indirect and everywhere else in the world gets far, far more back from their taxes.

the beer revolu

Geuze wrote: »

A single person on the average wage pays the following in direct taxes:

Germany = 49.1%
Irl = 26.6%

2013 data

See here:
http://www.oecd.org/germany/taxingwages-germany.htm


Direct taxes are lower in Ireland, but indirect are higher.

You can't go around saying stuff like that.
Everyone knows that Irish people pay the highest taxes in the world - both direct and indirect and everywhere else in the world gets far, far more back from their taxes.

Greyian

Flex wrote: »

No, it sounds about right

60 cent per 35.5ml measure in a 700ml bottle is €11.83
Bottle of Jameson in Tesco is €29.25, so VAT at 23% is €6.73 of that
VAT+Excise is €18.55 of that €29.25, or 63% (feel free to correct my workings above if theyre incorrect!)

So if that is correct, of that €29.25 you pay the supplier and retailer actually only charge you €10.70, which seems low? Have I double counted the VAT and excise perhaps? I would guess its a similar percentage for beer and even higher for wine

The VAT on a bottle of Jameson at €29.25 would actually be €5.47 (the net is €23.78, and 23% of that is €29.25).

It would still put the VAT+Duty at €17.30 though, which would still be almost 60% of the total price the customer pays.

nosietoes

Also, didn't the government yet again increase tax relief for Brewers this budget? To encourage the industry and their use of Irish grain?

I'm not saying that we don't pay a lot of tax on our booze but you can't say that the government isn't doing something to encourage the growth of the alcohol industry in Ireland that realistically should look at export markets because the market abroad is a lot bigger than domestically.

Geuze

Flex wrote: »

No, it sounds about right

60 cent per 35.5ml measure in a 700ml bottle is €11.83
Bottle of Jameson in Tesco is €29.25, so VAT at 23% is €6.73 of that
VAT+Excise is €18.55 of that €29.25, or 63% (feel free to correct my workings above if theyre incorrect!)

29.25 divided by 1.23 = 23.78

29.25 - 23.78 = 5.47 VAT


The typical mistake made by people is to do this: (29.25)*(0.23).