Salvation Army Wants Alcohol Tax Raised

November 17, 2009 New Zealand Taxation

In their newest report, the New Zealand Salvation Army has said that excise taxes on alcohol should be raised by a further 25%.

The Salvation Army released a report on November 15th, entitled Excising Excess, which claims that in order to minimize the harm from alcohol abuse and alcohol related crimes, the New Zealand Government needs to immediately raise taxes on alcohol. The proposed 25% increase in excise tax on alcohol would see a total of NZ$0.20 added to the average price of a handle of beer, a NZ$0.50 increase to the price of a bottle of wine and approximately NZ$2 to the price of “8 per cent strength six-pack of bourbon and cola”.

It is claimed in the report that the increase in alcohol taxation could see a 10% drop in alcohol consumption by teenagers and heavy-drinkers, those who the Salvation Army claims to be most price sensitive. Even with the consumption drop, Salvation Army estimates place the revenue from the tax increase at NZ$160 million. This could subsequently be invested in the minimization of harm caused by alcohol and alcohol damage awareness campaigns. The Hospitality Association has already responded to the proposal, saying that price increases are not the most effective means of altering binge-drinking behavior.

The report can be viewed on the Salvation Army website.