Greece imposed a 125% excise tax leap

Greece imposed a 125% excise tax leap

Trade body SpiritsEurope has urged the Greek government to phase in a cut on excise duties as it claims current measures are not working. 

SpiritsEurope said today (16 December) that a raft of tax increases on alcohol, introduced in 2009-2010, is not generating expected revenues, while also damaging tourism in the country. Authorities should cut the rate by EUR250 (US$344) per 100 litres of pure alcohol annually until 2016, starting next year, SpiritsEurope said.

The organisation's call follows a study by the Foundation for Economic and Industrial Research (IOBE), commissioned by the Greek spirits producers, that claims Greece's tax revenues this year will be below the level it was prior to the increases. The study also said that smuggling, adulteration of spirits products and tax evasion have increased.

SpiritsEurope said: “The gradual reduction of the tax ... would have a positive impact on employment, tax collectability and revenues, on the size of the illegal trade of beverages and competitiveness of the tourism sector.”

In 2010, excise duty on alcohol in Greece rose a number of times - by 20% in both February and March and 30% in April. According to SpiritsEurope, duty on alcohol increased by 125% from 2009 to 2010. Value added tax also increased as the government attempted to rebalance the country's finances.

The duty rises affected all alcohol categories, however spirits were hit hardest because of their higher abvs.

In October, SpiritsEurope director general Paul Skehan warned that exchequers will not get the expected revenues from excise tax increases in place across Europe.