Alcohol industry wants ’holiday’ on paying taxes until the ban is lifted
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Cape Town – The government’s latest decision to extend the alcohol ban has left the alcohol industry with no choice but to apply for a deferment of the payment of excise duties until the ban is lifted.
According to the sector, the ban impacts jobs and livelihoods of those directly involved in the sector.
South African Liquor Brand Owners Association (Salboa) chief executive Kurt Moore said: “The government did not indicate when alcohol sales will be allowed again.
“It is prudent that the industry applies all possible cost-preservation measures to keep it afloat: delaying excise tax payments is a significant factor.
“The industry and its entire value chain face an enormous financial crisis, and its capacity to make these payments is severely constrained.”
Moore said the industry paid SA Revenue Service an average of R2.5 billion per month in excise tax contributions for locally produced and imported products.
The industry was granted deferment of at least R5bn in excise tax payments for July and August last year when the government banned alcohol sales with immediate effect.
Vinpro, which represents 2 500 local wine producers, cellars and industry stakeholders, said it estimated that in the 17 weeks following the prohibition in March last year, the wine sector lost more than R8bn in direct sales revenue.
Vinpro chief executive Rico Basson said: “With less than a week before the 2021 harvest commence, the South African wine industry faces a grim picture of business closures, job losses, downward price pressure, structural damage to sub-sectors, a decline in production without investment, quality deteriorating, a loss to the fiscus and diversification away from wine.”
In his address to the nation this week, President Cyril Ramaphosa said after a number of consultations with the National Coronavirus Command Council (NCCC) a decision was taken to leave the country on adjusted level 3 until February.
According to Ramaphosa health services in several parts of the country reported that the prohibition of alcohol sales had significantly reduced the number of trauma cases seen in hospitals over the New Year period.
The provincial government's head of health Dr Keith Cloete said: “We saw a significant sustained decline in trauma presentations to emergency centres immediately after the alcohol ban was reinstated.
“Two weeks before the alcohol ban the average number of cases seen across five areas was 76%, two weeks after the alcohol ban that number dropped to 43%.
“The maximum that was recorded on boxing day of 157 reduced to 66 cases on New Year’s day.”
According to Cloete, before the alcohol ban, there were 1 247 cases, but after the alcohol ban, there was 615 cases reported.