Ministers are proposing halving their planned increase in alcohol duty following significant pressure from industry leaders.
The Council of Ministers has put forward an 8.9% increase in alcohol duty for 2024, putting an extra four pence on a pint of beer.
Jersey's Hospitality Association said the government was kicking the industry while it was down.
It warned the increase would untold added pressure on businesses in the sector, predicting venues would close as a direct consequence.
A scrutiny panel lodged an amendment, calling for a freeze on alcohol duty, and a plan for a separate level of alcohol duty or a rebate to be introduced from 2025 onwards to support the drinks and restaurant trade.
The government has now offered a compromise of a 4.5% rise, half the original tax hike.
It says it 'recognises the challenges' faced by the hospitality sector while also balancing the 'health consequences' of alcohol consumption.
A study released in Spring revealed that a quarter of islanders drink to 'hazardous levels'.
In their report, Ministers say that price regulation on alcohol is proven to reduce related harm and freezes in 2020 and 2022 have left local taxes 'lower in real terms' than other goods and services.
"Ministers are mindful of the impact of duty increases on the hospitality association. With that in mind, a proposed increase of 4.5%, 6.4 percentage points below June RPI, is a moderate increase that will limit the impact on the hospitality industry while still ensuring that the real terms reduction in alcohol duties is not worsened."
Nightclub Rojos announced it was closing its doors last month due to rising alcohol prices and Jersey's 'outdated licensing laws'.
The Council of Ministers say that the new up rate of 4.5% will add around two pence to a pint of beer, glass of wine or a single spirit.
It's estimated that the reduction in duty will slash £1.3m off the island's public finances.
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