The
government of Canada levies four distinct taxes on distilled spirits
products.
- Customs Import Duties: levied on spirits products imported
into Canada
- Customs Duty: equivalent to excise duty, levied on spirits
imported into Canada
- Excise Duty: levied on domestic spirits products
- GST: Goods and Services Tax levied at 7% of retail price
The Customs duty equivalent to Excise duty on imports and the excise
duty on domestic spirits are identical and are based on alcohol
content. The current rate is $11.066 per litre of absolute alcohol.
Since most spirits products are sold at 40% alcohol by volume this
means that the federal government receives $3.32 from each standard
750 ml bottle sold in Canada from this levy.
| Federal Revenues Collected
From the Sale of Distilled Spirits |
Since the federal customs and excise duties are "Flat" or "Per
Unit" taxes it is simply a matter of knowing the number of units
sold to determine the amount of revenue collected. For the fiscal
year ending March 31, 1995 Revenue Canada reported customs and
excise collections of $503 million on distilled spirits products.
In addition, $176 million in GST was remitted for a total of $679
million.
| The Federal Government Taxes
Beer and Wine at Lower Rates |
Federal excise levies are hidden and are unfair.
- they are imposed at the producer level and are hidden from
the consumer
- they discriminate against spirits
- based on pure alcohol, spirits are taxed at twice the rate
of beer and wine
- they are regressive - they weigh most heavily on low and middle
income earners (i.e. takes a larger percentage of income from
individuals with lower income)
Federal excise collected from spirits,
wine and beer for the fiscal year ending March 31, 1995 was $1.2
billion
The
Economic Impact and Taxation Burden from The Distilled Spirits
Industry
1996 Report
by the Conference Board of Canada
Copyright
© 1999 Association of Canadian Distillers
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