Revenue-Raising Potential of Alcohol and Tobacco Excise Duties in Germany and Poland

Malgorzata Magdalena Hybka

Abstract


Accumulation of funds to cover government spending is the primary purpose of taxation. According to multiple authors, excise duties are classified as taxes with the highest revenue-raising potential. In the OECD member states, excise duties constitute a considerable source of state revenue. They account on average for 7.6% of total taxation. The European Union member states apply a harmonized structure for excise duties on selected products. They include, above all, alcoholic beverages and tobacco products. The average share of alcohol and tobacco taxation in GDP and total taxation for EU-28 in 2014 equaled, respectively, 0.8% and 2.2%. Although taxes on alcohol and tobacco are in no small extent harmonized, their design may sill vary between member states and strongly affect their collection efficiency. The primary purpose of this article is to compare excise duties imposed on alcohol and tobacco in Germany and Poland. The article is divided into three parts. The first addresses theoretical aspects concerning excise taxation. The second reviews the design of alcohol and tobacco excise duties in Germany and Poland. The third evaluates the revenue-raising potential of these duties in both countries.


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DOI: http://dx.doi.org/10.22158/jepf.v4n1p1

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