The drinks industry is calling for a tax cut amid data showing the freeze on Scotch Whisky and spirits duty has boosted the Treasury by an additional £1.4bn over the last five years.
The tariff on Scotch and spirits has remained steady since it was first introduced in 2019, yet revenue from this duty has now exceeded the official forecasts, reported City AM.
The Office for Budget Responsibility predicted revenue from the alcohol tax as £3.8bn in 2020/21, yet figures show that sales at the frozen duty actually added £4.1bn.
However, after the policy was reversed with a 10% increase in alcohol duty during the chancellor’s budget last year, the Scotch Whisky Association is calling for the government to cut alcohol duty in this year’s upcoming budget.
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Scotch Whisky Association director of strategy and communication Graeme Littlejohn said: “The government’s own figures show that year after year the official forecasts have underestimated the boost that freezes and cuts to spirits duty can give the economy.
“By cutting duty in the March budget, the Chancellor can turbocharge tax receipts, and incentivise the UK’s world-class spirits industry, led by Scotch Whisky, to invest in the economy through jobs, capital projects and future growth.
“The Chancellor has said that he believes that low-tax economies are more dynamic and generate more revenue for public services. These figures once again show the benefit of supporting the Scotch Whisky industry and that the right decision for the industry and the economy on 6 March is to deliver only the fifth cut in spirits duty in the last 100 years.”
The renewed calls from the drinks industry come amid an upcoming rise of 30% in the minimum price of alcohol in Scotland, as new measures are introduced to tackle excessive drinking.
