Excise Tax on Alcohol – Fiscal or Non-Fiscal Objective?

Abstract

Purpose – The purpose of this article is to assess the level and structure of excise tax on alcohol in European countries in the context of the implementation of the fiscal objective (increase in budget revenues) and the non-fiscal objective (striving to reduce alcohol consumption by reducing economic availability of alcohol). Research method – In order to illustrate the significance of the impact of alcohol excise taxes on state budget revenues (realization of the fiscal objective), an analysis of the level and structure of alcohol excise taxes in EU countries was carried out. In addition to the traditional tabular and graphical analysis, a study was conducted to determine the impact of excise taxes on the economic availability of alcohol in each country (realization of the non-fiscal objective), taking into account both differences in annual net income expressed in euros and in annual net income expressed in PPS (Purchasing Power Standard) for ethanol. Results – The analysis carried out shows that despite the harmonization of alcohol excise taxes in the European Union (EU) member states, there are numerous differences in the application of excise taxes, in the level of excise-derived budget revenues and in the degree of impact of excise taxes on the economic availability of alcohol. There is still some room in the European alcohol taxation system for further harmonization of rates, harmonization of exemptions and categorization of certain products, and more effective use of this instrument in the alcohol policy of individual countries. Originality /value /implications /recommendations – The originality of the presented approach is due to the comprehensive presentation of the impact of excise taxes on alcohol on the realization of the fiscal and non-fiscal goal in EU countries.