South Africa Wine, the representative body of the country’s wine industry, has firmly opposed the proposed 6.83% increase in excise tax on alcoholic beverages, as outlined in the recent budget speech that was not formally tabled.
The organisation argued that this figure, which surpasses the latest consumer price index (CPI) by over 3.5%, places undue strain on an industry still grappling with economic pressures.
South Africa Wine said they have engaged with policymakers, presenting evidence that a fair taxation framework – capped at CPI – alongside policy certainty is crucial for the industry’s sustainability. The organisation emphasised that the current excise tax is already in line with the guidelines set by the National Treasury, and any further increases should align with inflation to provide stability for businesses and workers across the wine value chain.
Wine industry calls for fair tax policies
“The proposed increase threatens to undermine the industry’s recovery, negatively impacting job security, investment, and economic contributions across rural and urban communities. The knock-on effect could also drive consumers toward illicit alcohol markets, mirroring trends seen in other sectors, such as tobacco, where illicit trade now accounts for nearly 65% of sales,” the industry body stated.
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According to South Africa Wine CEO Rico Basson, the suggested tax hike, which exceeds the inflation rate, stands in direct opposition to the economic growth targets outlined by President Cyril Ramaphosa in his State of the Nation Address (Sona).
“At a time when the government aims to exceed the current GDP growth through investment and economic reform, imposing an above-inflation excise tax increase risks doing the opposite – stifling growth, discouraging investment, and threatening thousands of livelihoods in the wine value chain,” Basson said.
South Africa Wine urged the National Treasury to reconsider this proposed hike and adhere to the established practice of linking excise adjustments to CPI. The organisation believes that a fair and transparent approach will support the long-term success of the wine industry, which plays a vital role in job creation, rural development, tourism, and export earnings.
With the final 2025/26 Budget Speech scheduled for 12 March 2025, South Africa Wine reiterated its commitment to collaborating with the government on a balanced and sustainable taxation framework that ensures public revenue security while protecting the wine industry.
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