Source : Perth Now news
It was designed to help spawn a new wave of homegrown craft distilleries but instead it’s helping fuel a bootleg booze black market.
After repeated warnings from industry that dodgy operators were exploiting the alcohol manufacturers remission scheme, the Australian Tax Office is clamping down.
On Tuesday, the ATO introduced measures to tackle rorting of the incentive, which allows distillers to pay zero excise on the first $400,000 of alcohol they make each year.
On top of measures already introduced in July, the tax office will place greater scrutiny on manufacturers applying for new licences and businesses in their first two years of operation.
“Businesses or promoters that deliberately seek to rort the scheme undermine its integrity and disadvantage competitors who are complying with the law,” deputy commissioner Rowan Fox said.
“It’s not about if you’ll get caught, it’s when.”
In practice, that should help weed out organised criminals setting up no-name distilleries to produce low-quality, excise-free liquor.
The spirits are often then snapped up by “aggregators” who on-sell dodgy gin and vodka to hospitality venues at heavily-discounted prices.
While the industry broadly supports the remission scheme, the Spirits Council of Australia said it was costing taxpayers millions of dollars and blurring the line between legal and illicit alcohol.
“What the ATO has announced will help crack down on a lot of the rorting and the shonks,” the council’s executive director Steven Fanner told AAP.
While tough compliance action was critical, Australia could not enforce its way out of the issue, Mr Fanner said.
He also argued that Australia’s internationally high rate of alcohol excise was helping drive the spirits black market, with organised crime syndicates using existing illicit tobacco distribution networks.
The excise contributes about $31 to a standard bottle of liquor, creating huge profit potential for vendors who can get their hands on excise-free alcohol.
Victorian police suspect the trade has driven arson attacks on licensed venues across Melbourne, while researchers have found almost one in three bottle shops visited across Victoria, NSW and Queensland contained suspected illicit alcohol products.
Nationals MP Pat Conaghan, a former undercover drug enforcement officer, called for a standalone federal agency to break the back of the business models of organised criminals.
“We know that the rise of illicit alcohol has come on the back of illicit tobacco and vapes, and they’re using the same business model,” he said.
