A request by the alcohol industry for the suspension of excise tax levied on alcoholic beverages amounting to R5,1 billion has been granted by National Treasury. A delay of 90 days has been proposed by treasury for excise tax owed to the South African Revenue Service (SARS) by the industry.
The South African alcohol industry spokesperson, Sibani Mngadi, said the sector had last month applied for the deferment until the ban in sales is lifted.
He said, “With the reintroduction of the ban on all alcohol sales with immediate effect from July 12, the industry and its entire value chain faced a crippling financial crisis.
“The sustainability of the sector, now and in the post-covid-19 era, was dependent on this deferment if further job losses are to be avoided,” Mngadi states in a press release issued by FTI Consulting on behalf of the liquor industry.
The South African alcohol industry includes, but is not limited to, the National Liquor Traders Council, South African Liquor Brandowners Association (SALBA), the Beer Association of South Africa (BASA), Vinpro, the National Liquor Traders Council, and manufacturers.
In response to the industry’s request, the National Treasury proposed introducing a 90-day deferral on excise taxes to be made in August and September of 2020. The deferrals will be effected through the Customs and Excise Act Rules and will be published by SARS.
Mngadi said this was money that was vital to the country’s economic future, and that the focus should now be on reviving the sector as quickly as possible.
Government’s ban on the sale and distribution of alcohol as a drastic measure to curb the spread of the novel coronavirus and halt trauma cases resulting from alcohol use, has sparked much debate.
For months the alcohol industry has called for a more targeted approach in dealing with the problem of alcohol misuse. It requests that government enter into discussions with the industry to implement targeted interventions to promote responsible consumption.
“The fact that the South African Medical Research Council is also calling for a lifting of the blanket ban on alcohol sales confirms our belief that there are better and more sustainable alternatives to the ban,” Mngadi added.
“We reiterate our commitment to partner with the Government to create a social compact that drives behavioural change regarding the use and consumption of alcohol.”
The industry says it shares government’s concerns regarding the covid-19 pandemic and would continue to support efforts to curb this unprecedented health emergency.
Mngadi said the industry would continue to offer its unanimous support in making our assets available to Government in fighting this pandemic together.