State budget 2021: no, the alcohol tax will not be reduced by ten percent

On the night of Tuesday, December 1, the FRP and the ruling parties agreed on a new state budget, which included a 10 percent cut in alcohol taxes.

Or is that true?

This will be more expensive in 2021

One thing affects cuts

Do not do it completelyAccording to the Wine and Spirits Suppliers Association (VBF):

– The government calculates the proposed budget cut where there was an increase of 3.4 and 3.5 percent in the so-called “index regulation” of alcohol taxes, says General Secretary Ingunn Jordheim at VBF to Dinside.

– This means that we cannot take the current rates on alcohol taxes, which do not have this index adjustment before January 1, 2021, and deduct ten percent. Rather, we should add 3.5 percent to today’s alcohol taxes and then deduct 10 percent, he explains.

However, Jordheim emphasizes that VBF is satisfied with what she calls a first step on the road to reducing cross-border trade, but it doesn’t matter if this is not accompanied by a plan on how we will monitor and reduce cross-border trade permanently.

So how much are the fees reduced? Really?

This with indexing applies not only to alcoholic beverages, but also to food, snus, tobacco, and various other goods and services.

Dinside has performed a calculation to show how big the cuts are Really It becomes alcohol and tobacco if we take the current rates as a starting point:

• Then the alcohol tax is reduced by (100- (103.5 * 0.9)) = 6.85 percent versus what they are now. For a half-liter can of beer, the tax reduction is 78 øre. With VAT, it will be 98 øre.
• The snus tax, which is reduced by 25 percent in the state budget, is actually reduced by (100- (103.7 * 0.75)) = 22.23 percent if one compares them with the current level. Here, the original government proposal was that the snus tax should be increased by 3.7 percent, which should then be done before deducting the advertised 25 percent.

Normal procedure

The Finance Ministry writes to Dinside that in the government’s proposal for the state budget for 2021, it is proposed that tax rates on alcohol and tobacco products be adjusted upward with an expected price increase of 3.5 percent. .

When the budget unit means that the tax on beer and wine is reduced by ten percent compared to the government proposal for 2021, it means that the real value of the tax on beer and wine is reduced by ten percent. percent in 2021 compared to the tax level in 2020.

Similarly, the budget unit means that when the snus tax is reduced by 25 percent compared to the government’s proposal for 2021, the real value of the snus tax will also be reduced by 25 percent in 2021 in compared to the tax level in 2020.

This is a completely ordinary procedure when negotiating a budget proposal for next year, according to the ministry.