The continue prohibition on alcohol and cigarette sales has come at a hefty cost to South Africa’s fiscus, says SARS commissioner Edward Kieswetter.<\/p>\n
Kieswetter told CNBC Africa<\/a><\/strong> that the country was already facing a shortfall as a result of the nationwide coronavirus lockdown.<\/p>\n He said that employment taxes are down by R14.5 billion (around 9%), while corporate income tax is down R16 billion (28%).<\/p>\n Other notable figures include:<\/p>\n “If you then add the downstream taxes from those companies you will also add the loss in corporate income tax and employment taxes that gets you to a shortfall of R15 billion,” said Kieswetter.<\/p>\n Costly alcohol ban<\/strong><\/p>\n This week, wine body Vinpro<\/a> <\/strong>said the initial nine-week ban on local sales, and five-week ban on exports will result in more than 80 wineries and 350 wine grape producers going out of business, with a potential loss of more than 21,000 jobs across the value-chain over the next 18 months which may escalate significantly following the second ban.<\/p>\n \u201cMany wine businesses have already closed down due to the previous and current trade restrictions, and the rest of the industry will simply not survive a continued alcohol ban, leaving tens of thousands of employees without any income, possibilities or hope,” said Vinpro managing director Rico Basson.<\/p>\n Other industry players have warned of the significant cost of the ban – including plans to withhold investments from the country.<\/p>\n There are also concerns that the ban may have a more far-reaching impact on the liquor industry. Industry body SpiritsEUROPE has raised concerns<\/a> <\/strong>that South Africa\u2019s alcohol sale ban violates existing trade agreements.<\/p>\n \u201cThe ban rips away all the benefits from the Economic Partnership Agreement between the EU and South Africa at a time when we should actually find ways to deepen our trading relations to support each other\u2019s recovery processes,\u201d Ulrich Adam, director general of spiritsEUROPE, said.<\/p>\n \u201cBanning sales also means banning imports of European spirits \u2013 while South Africa continues to export particularly wine which has 110 million litre quota duty-free export into EU under the EPA, contributing to R5.7 billion in net exports earnings for South Africa on alcohol.<\/p>\n \u201cOur member companies operating in South Africa are deeply concerned about the uncertainty of current trading conditions.<\/p>\n \u201cThe lack of clarity on whether and when the ban might be lifted makes business planning impossible. We therefore need a clear and reliable timeline.\u201d<\/p>\n\n
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