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Deferment of tax payment welcomed but alcohol sector irked by repeated restrictions

By Jonisayi Maromo 3h in the past

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THE three-month deferment of excise tax payment by the alcohol sector in South Africa gives much-needed reprieve for the beleaguered sector, the South African Liquor Brandowners Association (Salba).

In his televised deal with on Sunday night time, President Cyril Ramaphosa introduced that the ban on the sale of alcohol had been lifted and the payment of excise taxes by the alcohol sector could be deferred for 3 months, to ease the burden on the sector because it recovers.

Salba chairperson Sibani Mngadi mentioned the sector remained below pressure, given the excellent restrictions across the sale of alcohol “with no rationale or evidence provided”.

“The partial opening of sales as well as three months’ deferment in excise tax payments due on alcoholic beverages is a huge relief, but we are nowhere near being out of the woods, especially for the off-site consumption outlets that continues to be restricted to trading Monday to Thursday with no rationale or evidence provided for this decision, in spite of our many requests to secure this from government,” mentioned Mngadi.

He mentioned the federal government’s use of prohibition of the sale of alcohol, in response to the Covid-19 pandemic, has had “devastating” penalties.

“There was no justification for the prohibition – implemented with no warning, no consultation and poor empirical justification – that prevented legitimate businesses supporting more than 1 000 000 livelihoods across South Africa from operating. These include businesses in the agriculture, tourism, hospitality and manufacturing sectors, and importantly, hundreds of thousands of SMEs,” mentioned Mngadi.

“Right now, our focus is on economic recovery, and the role our industry can play is critical.”

Mngadi mentioned authorized companies in South Africa wanted to be allowed to commerce with out the continuous danger of additional bans.

“The irrational and arbitrary bans have threatened the lives and livelihoods of tens of thousands of people. In addition, the recent looting and destruction of liquor stores have left many small traders and independently owned liquor stores in financial ruin, some of which may never recover,” he mentioned.

“The combined impact of the alcohol bans and recent looting has also caused irreparable reputational damage to South Africa from an investor confidence and international tourism perspective.”

Salba chief govt Kurt Moore welcomed the three months’ deferment of about R2.5 billion in excise taxes that Salba had sought when the federal government imposed the most recent ban on the sale of alcohol.

“These bans are harmful to both government and business revenue and they are serious threat to jobs, 248 759 jobs are still at risk across the industry – about 1.59% of the national total of formal and informal employment for 2020. In addition, the alcohol industry lost 161 days of trading between 26 March 2020 and 25 July 2021 due to the government’s alcohol bans,” mentioned Moore.

“Even before the cost of the looting to the alcohol industry is factored in, the four alcohol bans have already cost the country’s GDP an estimated R64.8bn or 1.3% of GDP.”

The alcohol trade has repeatedly warned “and demonstrated via research” that the bans had fuelled criminal activity, significantly amongst crime syndicates whose positions had been considerably strengthened throughout the prohibition on the sale of liquor.

African News Agency (ANA)


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