Show download pdf controls
  • Wine equalisation tax gap

    The wine equalisation tax (WET) gap is the difference between WET payments and WET refunds, and the amounts that should have been reported if all taxpayers were fully compliant with the law.

    WET applies to wine (and selected products such as cider) consumed in Australia. It generally applies at the last wholesale sale (where the sale is to a retailer), but also applies to direct sales from wine producers to consumers.

    The WET system also includes a producer rebate scheme which entitles wine producers to a rebate of up to $350,000 per financial year. This effectively makes the first $1.2 million of domestic wholesale sales exempt from WET.

    The maximum producer rebate was reduced from $500,000 to $350,000 from the 2018–19 financial year.

    The tax gap may occur for a variety of reasons. There may be taxpayers who should be – but are not – registered. Additionally, some taxpayers may claim WET credits or the producer rebate when they are not entitled.

    We are focussing on reducing non-compliance through:

    • monitoring and assurance, including refund integrity, claim and payment trends as well as specific high risk areas
    • educating taxpayers to help them understand their responsibilities
    • compliance activities, and correcting taxpayers who do not get it right.

    Estimate of the tax gap

    The updated estimate for the WET gap covers the period from 2011–12 to 2016–17 financial years.

    Overall we have seen the gap reduce and stabilise over the trend period. The current WET net gap estimate for 2016–17 is $21 million, or 2.5% of the total amount we expect to receive. In other words, we estimate that over 97% of expected net WET amounts are received – the majority voluntarily.

    Find out about:

    See also

      Last modified: 17 Oct 2019QC 57167