Authority says no to tax cuts for small breweries
The Competition Authority is opposed to the proposed tax cut on beer from micro breweries. They fear that the consumers will suffer.
The consultation deadline for the Tax Agency’s proposal for a tax change was published this week, Dagbladet writes. The agency proposes a 20 percent reduction in the tax for the first 50,000 litres of beer, 15 percent for the following 50,000 followed by 10 per cent and 5 per cent for the same volumes.
The cut should only apply to breweries that deliver less than 500,000 litres of beer a year and applies to beer with between 3.7 and 4.7 volume per cent alcohol.
– Our concern is that the proposed tax reduction and the design of it will weaken the incentives of the small breweries to grow, so that the competition will suffer, says CEO in the Norwegian Competition Authority, Magnus Gabrielsen. He believes it will be less attractive to invest in growth beyond 500,000 litres, as the entire incentive will no longer apply.
The brewery and beverage association, who first suggests the charge cut, disagrees with Gabrielsen’s reasoning. For a manufacturer that supplies shy of 500,000 litres, the saving is about NOK 1, while the tax burden before discount is NOK 22 for one litre. The association believes manufacturers will think it’s such a small amount that continued growth is more attractive.
© NTB Scanpix / Norway Today
