Tax office cracking down on rorts of the wine equalisation tax producer rebate
- From: The Weekly Times
- February 19, 2014
THE Australian Taxation Office is cracking down on rorts of the wine equalisation tax producer rebate and urging people to give themselves up.
Wine Victoria chairman Damien Sheehan said up to 90 per cent of Victoria’s wineries relied on the rebate to remain viable.
A spokeswoman confirmed the ATO was conducting criminal investigations into allegations of fraud by nine unnamed “entities”.
These included fictitious transactions, falsification of documents, non-payment and/or reporting of WET liabilities and falsely purchasing wine products under the quote system, which were then exported overseas.
“The ATO has received a number of voluntary disclosures from taxpayers relating to their involvement in WET rebate arrangements,” the spokeswoman said.
“Voluntary disclosure will result in significant penalty reductions.”
The ATO last year issued a Taxpayer Alert to warn people against taking part in schemes to avoid paying WET or exploit the producer rebate and encouraged those who had to voluntarily disclose their involvement.
“The ATO’s approach to addressing exploitation of the rebate is supported by the Winemakers’ Federation of Australia,” she said.
“Such arrangements undermine the intent of the rebate to assist small producers. These arrangements exploit the rebate, placing genuine producers and winemakers at a commercial disadvantage.”
WFA president Tony D’Aloisio in December called for the rebate to be scrapped for foreign winemakers and bulk wines intended for the private labels of retailers.
Wine Victoria’s Damien Sheehan said the rebate was crucial to the viability of the state’s wine industry, which was mostly made up of small producers in regional areas.
He said a recent survey found 60 per cent of Victorian producers relied on the rebate for their profitability, but analysis found the level could be as high as 90 per cent under current market conditions.
“We need to be realistic and vigilant about retaining the rebate,” he said. “We’re on the same page as WFA in terms of trying to get back to the original intent of that rebate
The wine producer rebate was introduced in October 2004 to help Australia’s large number of small winemakers.
According to government documents, WET rebates for 2008-09 totalled $221 million from a gross revenue of $950 million.
The rebate was extended in July 2005 to New Zealand producers who sold wine in Australia and their payments rose from $5 million in 2006-07 to more than $19 million in 2009-10.