Red Stripe up in arms over planned tax hike on alcohol

[Lazie]

Liquor company Red Stripe has threatened to pull its export business out of Jamaica if the Government goes ahead with a plan to review its recently announced tax on alcohol.
The company says it has been frustrated by the efforts of Wray and Nephew to get the Government to change the tax system.
Since last Tuesday's announcement of a change in the regime for tax collection, Wray and Nephew has suspended its sales of alcohol and asked the government to review the tax.
Initially, the Government rejected the proposal but RJR News understands that subsequent to that decision, technocrats at the Finance Ministry have been asked to review it.
On Wednesday, officials of Red Stripe, who were clearly not in support of the move, went to the Finance Ministry to register their concerns with a threat to relocate the export side of their business out of Jamaica.
If Red Stripe carries through with its threat, it could cost some 300 jobs and 40 to 50% of its business.
Red Stripe earlier this year sent home over 100 employees citing an unfair tax structure for alcohol which it says has been hurting its business.

[Lazie]

Finance Minister sticks by alcohol tax

Minister of Finance Audley Shaw has declared that he will not bow to pressure from some manufacturers of alcoholic beverages who continue to hoard their products as a sign of protest against a new tax measure which was announced just over a week ago.
Mr. Shaw says he has no intention of withdrawing the Special Consumption Tax (SCT) on the alcoholic content of beverages including tonic wines.
He was responding to reports that the biggest player in the wines market, J. Wray and Nephew, has been refusing to sell its products to retailers.
Other players in the market have followed suit.
Speaking with RJR News on Wednesday night, a defiant Finance Minister said while the action taken by those entities is regrettable, his Ministry is compelled to correct imbalances which exist in the rum manufacturing industry.
He made it clear that the tax measure will remain.
“Now the decision has been made by the government to begin to tax alcohol or to tax drinks based on the amount of alcohol that is contained in that drink and this is the decision that we have made,”
“So the tonic wine people have had a free ride for a pretty long time now and the time has come for a correction that is all that is taking place now,” Mr. Shaw said.
He defended his decision to impose the SCT on alcoholic content.
The Finance Minister said it was the most effective way of improving inflows into the country's coffers.
“Now correction is not always a painless process but correction has to take place because the consumption continues but the revenue for the country is now lost,”
“How do I run the country? How do I fix the roads? How do I pay the teachers? How do I fix the bridges and put all the required necessities in our hospital? I must lose revenue but I must not find any other way to make up for that revenue, it cannot be,” Mr. Shaw said.

[Mosiah]

Gwaan One F@rt!

[Lazie]

Gwaan One F@rt!

Do you agree or disagree with the position taken by the Minister?

[Mosiah]

I have not formed an opinion. I am watching this one play out some more.

[Assasin]

most of the tonic wine is said to be imported from TNT, so that may help you form your opinion

[Lazie]

Previous alcohol tax costs the gov’t $2bn in revenues


Finance Minister Audley Shaw has revealed that the country lost nearly $2 billion in revenues due to inequities which existed in the previous tax regime for alcoholic beverages.
Speaking with the Financial Report on Wednesday night, the Finance Minister blamed the fall-off on previous reliance on taxing beer products.
“The manufacturers of tonic wine have really gotten away over the past couple of years with producing and selling high alcohol content wine with no corresponding taxes to support it,”
“At the same time the income that we have gotten as a country from beers have fallen precipitously. We have lost almost $2 billion in revenues from beer over the past three years and this has not been made up from revenues in tonic wine which have been on a lower tax regime,” Mr. Shaw said.
Last week Mr. Shaw announced new revenue measure which will see the tax man going after beverages including tonic wines, cordials, liqueurs, vodka, whisky, brandy and gin.
The government has decided to apply what it calls a specific Special Consumption Tax rate based on their alcohol content, which will result in higher taxes being charged for products with high alcohol content per litre.

[ReggaeMike]

Oh boy.

So it look like the choice is:

1. keep the tax and only get taxes from Red Stripe

2. raise new taxes and only get taxes from Wray and Nephew and other tonic wine makers.

[Mosiah]

just did!

[Mosiah]

or drink milk.