The renewed prohibition of alcohol sales has resulted in the South African alcohol industry having no choice but to apply for a deferment of payment of excise duties to the South African Revenue Service (Sars) valued at R5-billion for July and August.
In a statement issued on behalf of the South African Liquor Brandowners Association, the Beer Association of South Africa, Vinpro, and National Liquor Traders Council, liquor industry spokesperson Sibani Mngadi explains that alcohol excise tax is imposed at the point of production, meaning that the industry is liable to pay excise tax on end-products that are in warehouses, but cannot be sold as a result of the prohibition of sales which resumed on July 12.
The industry and its entire value chain are facing an enormous financial crisis and its capacity to make these payments is severely constrained, the industry states.
It adds that 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.
Mngadi says the industry will play an invaluable role in helping the economy recover after the pandemic. Currently, it supports more than 35 000 township-based businesses, including taverns; more than 10 000 off-site consumption retailers; and more than 22 500 labour-intensive firms, such as restaurants, hotels and wine estates.
“However, 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 notes.
The alcohol industry wants to rather work with government to create a social compact that drives behavioural change regarding the use and consumption of alcohol.