Alcohol Excise Taxation, Tax Share and Revenue in the European Union and the United Kingdom in 2022: An Overview and Modelling Analysis.

INTRODUCTION

Although increases in alcohol excise taxation have been identified as one of the 'best buys' of the World Health Organization to reduce alcohol consumption and attributable harm, excise tax shares-the proportion of excise tax included in retail prices of alcoholic beverages-remain low in Europe. Revenue derived from alcohol excise taxation, and how it is affected by changes in alcohol excise taxation, has not yet been widely explored.

METHODS

We conducted a search for revenues generated from alcohol excise taxation in all European Union (EU) countries and the United Kingdom between 2017 and 2022. We then calculated the average excise tax share for alcoholic beverages for 2022. Using regression analysis, we predict tax revenue per capita from the tax share, type of alcohol excise taxation, recorded and unrecorded consumption and prevalence of past-year drinking. To illustrate the potential for revenue increases, we conducted a case study on Germany.

RESULTS

In 2022, average revenue from alcohol excise taxation (119 euros per capita) and excise tax share (17.3%) were low in the EU countries and the United Kingdom, but showed sizable variation. The association between excise tax share and revenue from excise taxation was very high, with a Pearson correlation of 0.888 (0.720-0.958; df = 16; p < 0.0001). In regression analyses, only the excise tax share significantly predicted tax revenue.

DISCUSSION AND CONCLUSIONS

Marked revenue gains could be achieved in several countries having low tax shares by instituting increases in excise tax share, with only small effects on consumer prices.