Addressing the harmful use of alcohol - WHO Western Pacific Region

Addressing the harmful use of alcohol : A guide to developing effective alcohol legislation
Table 3.1 : Suggested legislative text
Inflation-indexed taxes on imported and domestic alcohol
1) The Minister may from time to time impose such rates of excise duty and exciseequivalent
duty on any alcoholic beverage type or class of alcohol beverage.
2) The rate of any duty established under subsection (1) shall be set out in an order of the
Minister made under this section. Any change in the rates of excise duty and exciseequivalent
duty made under subsection (1) of this section:
a) shall have regard to movements in the Consumers Price Index All Groups excluding
credit services; and
b) in the case of a change in the rates of excise duty and excise-equivalent duty for
alcoholic beverages, may come into force only on XX in any calendar year.
3) When setting a duty under subsection (1) the Minister shall ensure that the duty is set in a
manner which ensures that the rate of duty for domestically produced product and imported
product is the same.
Dedicated funding from alcohol taxes
Rationale
Revenue from taxes on alcohol typically goes into the general accounts of government. There
is no requirement that this revenue will be spent on reducing or meeting the costs of alcoholrelated
harm although it can contribute to police and justice budgets, offsetting costs arising
from alcohol-related traffic crashes, alcohol-related crime and public disorder. As general
revenue, it also offsets public health and health care arising from alcohol-related disease
and injury. At the same time, implementation and enforcement of effective alcohol policies,
including collection of excise duties, incur their own costs and may be perceived as expensive
if they are competing for budget against the full range of government services rather than
viewed separately in an alcohol cost-benefit analysis. In general though, government revenue
is not linked to government spending and spending will only relate to alcohol if it is a policy
priority.
Consideration can be given to dedicating a proportion of alcohol excise duties or a separate
levy on alcohol to alcohol control, health promotion and harm prevention activities. In some
jurisdictions, a commodity tax on petrol or proceeds from traffic fines is set aside for traffic
enforcement or prevention. In other jurisdictions, excise duty on tobacco is set aside for health
promotion and other programmes designed to reduce smoking-related harm. These are often
referred to as earmarked taxes as the spending is linked to the revenue stream.
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