Political Economy


Tax increases expected on alcohol in Sweden in line with the new budget

Saturday, 14 September 2013
Sweden to increase taxes on alcohol - that is, taxes on wine and beer to go up  by seven percent and the tax on spirits and very strong alcohol is to increased by a percentage point according to components of the governments upcoming autumn budge.

Media reports hold that following the increase, an ordinary bottle of wine bought from the government's alcohol monopoly, Systembolaget will increased  by Skr2, the price of a whole bottle of spirits is to increase by the same amount and a can of beer increased by Skr0.30 - Skr0.40.

The ain is that the tax on alcohol is expected to pull in around Skr730 million more to the state treasury if all remain equal.

All remain the same is called because in Denmark Alcohol is cheaper and it is just a bridge away. the challenge is will it not lead to increased purchases from Denmark or will in not increase smuggling and increased purchases from the EU?

According to Swedish television, customs, police and experts - believe this is the wrong way to go and are disappointed that the government is not listening but stocking its head in the sand.

"I will be surprised to hear Public Health minister, Maria Larsson sit on TV and say this is done to protect children and young people - they do not buy from  Systembolaget. It is smuggling that affects our children and youth," says Erika Nylander of the Spirit and Wine organisation in Sweden to Swedish news agency TT.

She does not believe that the tax increase will bring in Skr730 million more to the treasury as the government is proposing.

"It's a miscalculation. The government has not investigated the effects of illegal and legal import of alcohol."

However, before throwing the baby out with the bath water, the Swedish Institute of Public Health has previously recommended a tax increase on alcohol as an effective way to reduce the harm associated with alcohol.

"We are delighted with this decision. It was expected, since the government announced it already some years ago," says Pi Högberg, Head of the Institute of Public Health, to Swedish News agency TT.

The Public Health Institute believes it would be good with small periodic increases, rather than a drastic one. Experience from Finland shows that it is more effective than one large increase.

"We think it would be good to make a plan for periodic increases. If you make a drastic increase that would probably have greater effect on smuggling," She said.

Scancomark.com Team

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