Home > Dáil Éireann debate. Written answer 323 – Alcohol pricing [39696/22].

[Oireachtas] Dáil Éireann debate. Written answer 323 – Alcohol pricing [39696/22]. (26 Jul 2022)

External website: https://www.oireachtas.ie/en/debates/question/2022...

323. Deputy Patrick Costello asked the Minister for Finance the reason that alcohol-free beverages cost the same as their alcoholic counterparts given that no excuse duty applies; and if he will take appropriate steps to ensure that there is a price differential to encourage more persons to switch to alcohol-free drinks. [39696/22]

Minister for Finance: Alcoholic beverages are subject to alcohol products tax. For example, excise duty on beer is charged based on the percentage, by volume, of alcohol in the beverage. Typically, the excise duty on a pint of 4.3% ABV beer is 54 cent. Non-alcoholic beer is not liable for any excise duty.

Alcoholic beverages are subject to the standard rate of VAT, currently 23%. Ireland currently operates two lower rates of VAT, 13.5% and 9%. At present, Ireland applies the 9% VAT rate to certain non-alcoholic beverages such as tea, coffee and fruit juices where they are supplied in the course of catering. As the Deputy will be aware, this will revert to 13.5% from 1 March 2023 in line with the rest of the hospitality and tourism sector.

Any suggestion for extending the application of a reduced VAT rate further to non-alcoholic beverages would need to be considered carefully having regard to a range of factors including the impact on Exchequer revenues, and the practical concerns that it would be difficult to administer and would be likely to provide considerable scope for manipulation of the VAT system and opportunities for tax avoidance.

The retail price of non-alcoholic beers is determined by retailers and publicans and this should reflect the fact that no excise applies to such products as well as other factors. Other than the portion that is taxation, the Department has no role in setting the price of these beverages.

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