Chilean Presidential candidate Michelle Bachelet released her proposed tax reforms, which came with a red flag for the liquor industry: a tax hike on spirits that could increase wine prices in Chile by as much as 109%.
According to a report in El Mostrador, Bachelet recent proposal shifts from an early plan to assign a specific tax of 20 UTM (US$1554 approx.) for every 100 liters of alcohol.
However the change looks to create a tax that is proportional to the volume of pure alcohol in each kind of wine, whose rate would be matched with the average of member nations of the Organization for Economic Co-operation and Development (OECD).
According to the president of the Chilean Beer Producers Association (Acechi) Dirk Leiswitz, in practice it would mean that a bottle of wine or liquor sold at a high value today would pay less taxes, while a cheap beer could see an increase of up to 70%, since currently liquor taxes are based on the retail price.
Bachelet is the favorite to win Chile’s upcoming December 15th run off, and is part of the center-left party Nueva Mayoria.