Photo: Ross Jansen/African News Agency (ANA) Archives
Photo: Ross Jansen/African News Agency (ANA) Archives

Alcohol industry to apply for payment deferment of over R5bn in excise duties

By Marvin Charles Time of article published Jul 22, 2020

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Cape Town - The alcohol industry says it has no choice but to apply for a deferment of the payment of more than R5 billion in excise duties for July and August.

The latest prohibition of the sale of alcohol has resulted in the industry buckling under financial pressure.

South African liquor industry spokesperson Sibani Mngadi said alcohol excise tax was imposed at the point of production.

“This means our industry has a liability to pay excise tax on end products that are in warehouses, and cannot be sold as a result of the prohibition of sales with immediate effect announced last week on Sunday,” he said.

According to Mngadi, the total excise due for July is estimated to be R2 514 366 945. For August, the estimated excise would be R2 585 935 368.

Total excise payments due to the SA Revenue Service over these two months is R5 billion.

“The industry and its entire value chain are facing an enormous financial crisis, and its capacity to make these payments is severely constrained. The sustainability of the sector, now and in the post-Covid-19 era, is dependent on this deferment if job losses are to be avoided.

“However, the government’s nationwide ban on the sale of alcohol has far-reaching repercussions. A more targeted and nuanced approach is required, and the industry has appealed to the government to enter into discussions on reasonable and viable alternatives,” Mngadi said.

The liquor industry supports more than 35 000 township-based businesses (such as taverns), more than 10 000 off-site consumption retailers and more than 22 500 labour-intensive firms such as restaurants, hotels and wine estates.

Earlier this month President Cyril Ramaphosa announced an immediate reinstatement of the ban on alcohol sales: he said that there has been an increase in trauma unit admissions at hospitals, which placed additional pressure on facilities struggling to cope with the coronavirus pandemic.

Meanwhile The Southern African Agri Initiative (Saai) is gearing up for a court battle to have the ban on the sale and consumption of wine in restaurants set aside.

Saai chief executive Francois Rossouw said: “The government’s statement that the regulations are implemented to limit the spread of the Covid-19 virus and to prevent an overburdened healthcare system simply does not hold water.

"Government pretends to want to save the economy, but applies double standards when it comes to the application thereof. Taxis pose a major threat in spreading the virus, yet are allowed to function at 100% capacity.”

Cape Argus

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