The Government gives up $2.6 billion a year in taxes on tonic wines, by Richard Byles reckoning.

Byles, who is Red Stripe’s chairman, at the brewer’s annual general meeting on Friday said that distibutors of tonic wines benefit from a tax incentive aimed at helping tourism sector operators acquire table wines at a lower price, given them an unfair advantage over other players within the market.

According to Byles, the International Monetary Fund (IMF), the World Health Organisation and the Sugar Commission Inquiry have all endorsed “specific” taxation.

Specific taxation means that alcohol would be taxed based on alcohol content at the same rate per litre of pure alcohol for all beverages.

The concession is unfair because it allows tonic wines, which on average have 16 per cent alcohol per unit volume, to incur a tax charge 10 times lower than certain beers, such as Red Stripe Light, which carries 3.7 per cent alcohol per unit volume.

Aside from “going against good public health policy” aimed at discouraging high use of alcohol through higher tax charges, the concession makes compeitition more difficult for the local manufacturer of beer, which has been faced with a depressed market, at least since 2008.

Profits are down 48 per cent, the company had to lay off 150 workers and volumes have decreased by 2.5 million cases.

Byles blames the bulk of this poor performance on an unfair tax regime.

He wants is a level playing field and insists that the finance ministry removes “the inequities within the taxation system for alcohol in Jamaica.”

What’s more, Byles believes applying the tax on tonic wines this month, as alcohol companies make 40 per cent of their sales during hte Christmas period, could yield additional revenue that could address immediate issues, such as restoration costs for damage caused by Tropical Storm Nicole.

“How does J$1billion extra tax revenue sound over the next two months,” Byles rhetorically asked shareholders at the AGM held at the company’s headquarters on Spanish Town Road in Kingston.

He went on: “We are left to ask the question…why? Why would the government not introduce an initiative that can earn them J$2.6 billion additional tax revenue? Why would they ignore the IMF, WHO and the Sugar Commission Inquiry — all represented by some of the greatest minds in Jamaica and across the world. Why Minister Shaw, why? Do the right thing and give the industry a level playing field — let us the consumers make our choices based on our taste. Red Stripe is a national icon — let’s not tax it to death.”