5 | Increasing tax burden
The content of paragraph 2.3 of this report makes clear
that in recent years the tax burden on beer has grown,
largely due to changes in excise and VAT rates in many
of the Member States. We also pointed out it is realistic
to assume that a part of the decrease and changes
in beer consumption in Europe can be explained by
changes in taxation detrimental to beer, resulting in higher
consumption at home than in bars or restaurants. As
mentioned before, consumption within the hospitality
sector has a more positive impact on the economy. More
jobs, value added and government revenues are created
by each litre of beer consumed than in the retail sector.
Another negative side effect of an increasing tax burden
on beer, reported by some countries is that cross-border
trade is growing. This has for example been observed
in Poland and Sweden It is known that not all imported
beers from neighbouring countries are imported legally, so
it is likely that governments looses revenues on this cross
border trade.
Most recent changes in the tax burden on beer in Member
States are driven by an attempt to raise revenues to help
meet the large government defcits which are faced by
most of the countries in this study. Historically, raising
excise duties on alcoholic beverages and higher VAT
rates have often been the means by which revenues
are increased. Such fscal constraints are expected to
continue in 2011 and beyond, because of economic
conditions affecting public fnances.
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Major developments