South Africa’s biggest beermaker says government needs to make tax changes in February

South African Breweries (SAB) has called on the government to introduce a tax break in the February 2022 budget for smaller businesses to allow them to recover from the Covid-19 impact.

SAB vice president of Corporate Affairs Zoleka Lisa said the Covid-19 pandemic caused havoc that continues to be widely felt amongst the entire beer value chain – with more than 30% of local craft breweries forced to close and over 150,000 jobs lost.

This was further exacerbated by the different alcohol bans that were imposed on the industry to manage the pandemic, she said.

“SAB is of the view that there must a deliberate intention by the government to resuscitate the economy through providing tax relief for small and medium brewers.

“Last week the Minister of Finance went live asking the public to give him tips on what to prioritise for the Budget. Our main tip is to call for a tax break for smaller businesses to allow them to recover from the Covid-19 impact.”

SAB has also called on the government to consider granting a reduced excise duty. Part of the economic recovery of SMMEs should come from an excise rate discount that will allow them to recover and grow, said Lisa.

“Similar policies have been successfully implemented in several African countries, and have been found to stimulate local agriculture and the extensive value chains of the industry, creating direct and indirect employment.

“Taxes should not hinder a country’s economic goals, such as the push for economic recovery and the drive to increase investment in South Africa. The principle of economic growth and efficiency is maximized by a tax system that is aligned with these economic principles and goals.”

Lisa said South Africa’s excise tax policies need realignment as our economy gears for recovery.

“Blanket tax rates that lack nuance, that does not, for instance, take into consideration the size of the business and the weight of the tax liability it must bear, requires a serious review.

“For the sake of our industry, and the thousands of small businesses that call it home, we welcome any call from the government to reassess how excise policies can help create a  business-enabling environment,” she said.

Read: A message to Ramaphosa from one of South Africa’s biggest alcohol groups