New Regulation of Taxation of Beverages

  • Gerhard Lehner

With the beginning of 1992 a fundamental change in the taxation of beverages took effect. An ad-valorem tax on alcohol was replaced by a (higher) volume-related tax. Even though this change was revenue-neutral, it resulted in price increases for beer and spirits and a decrease in price-adjusted consumption. In the medium term, the change reduces the tax burden on alcoholic beverages.