Hike in Excise Duty May Prove Debilitating for Scotch Whisky
Scotch Whisky is expected to become more expensive in the UK after the British government hikes excise duty rates. Phillip Hammond, Chancellor of the Exchequer during the 2017 Spring Budget, announced the revision of excise duty rates. According to reports, the duty will increase by 4% (36 pence) per priced bottle.
The industry has termed the tax hike as a ‘major blow’ to the business, as the total tax on an average Scotch bottle (including value added tax and excise duty) will be 79% of the total cost. This amount is 21% higher than the total tax in 2010.
Producers of Scotch whisky have been campaigning in favor of lower taxes for the spirit. Their argument – the industry supports more than 40,000 jobs in the country and generates £4.9 billion for its economy.
The Scotch Whisky Association (SWA) has asked for a review of the duty system, as it has calculated that an average 70cl bottle will be costing £8.05, while the total tax will be £10.20. Julie Hesketh-Laird, acting Chief Executive at SWA, stated in a release, “A nearly 4% duty rise and a 79% tax burden on a bottle of whisky is a major blow, reversing recent progress.” She further added that at a time when the government should be supporting the sector, producers are facing the uncertainties of Brexit with the detrimental tax rise.
Even Diageo has requested the government for the reversal of the tax hike and redo the excise duty system.
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