South Africa’s liquor industry will resume excise tax payments this month after receiving a 90-day deferment on tax payments in July and August 2020 due to the second ban of alcohol sales.<\/p>\n
However, industry players are questioning the continued restrictions around alcohol sales as the country’s coronavirus case numbers continue to decline.<\/p>\n
Industry spokesperson Sibani Mngadi said that the alcohol industry\u00a0plays a vital part in the country\u2019s economy and could play an even more significant role in the post-Covid-19 recovery.<\/p>\n
“Fortunately, some normalisation of trading conditions has occurred to allow the industry to return to making this valuable contribution to the fiscus,” he said.<\/p>\n
However, he said that the\u00a0industry remains concerned that off-trade sales for home consumption have not returned to normal trading hours and days.<\/p>\n
Under South Africa’s level 1 lockdown regulations bottle store sales are still limited to between 09h00 to 17h00 Monday to Friday, and sales are not allowed on Saturday and Sunday.<\/p>\n
“Like other grocery activities, off-consumption sales of alcohol should not pose a risk to the spread of Covid-19 infections. The current trading limitations are a major constraint to the recovery of the retail sector and an inconvenience to shoppers who have no opportunity purchase after 17h00 and on weekends,” said Mngadi.<\/p>\n
Mngadi said that in 2019, the alcohol sector\u2019s contribution to the GDP was worth R179 billion, indirect taxes amounted to R72 billion (5.6% of the government\u2019s total income), and it provided work for 504,000 people.<\/p>\n
The industry is a significant job creator, and it is estimated that for each position created in the sector, it sustains an additional eight formal and informal jobs, he said.<\/p>\n
“The lockdown ban on alcohol trading caused severe financial stress on the industry, and recovery and normalisation are going to take a considerable period of time, potentially years.<\/p>\n
“Above inflation increase in excise in February 2021 would prolong the hardship and negatively impact our recovery efforts. Indeed, as a result of the current level of excise duty, the industry already generates disproportionately high revenue for the government,” Mngadi said.<\/p>\n
Mngadi said that the industry has listened to president Cyril Ramaphosa\u2019s call for a new social compact around tackling the issues of illicit alcohol trading, binge and underage drinking, drinking and driving and gender-based violence.<\/p>\n
\u201cThe industry has already committed R150 million to a programme of targeted interventions that will address these issues, focusing on achieving significant behaviour change in individual and community approaches to alcohol abuse.<\/p>\n
“The sector is willing and able to contribute significantly to the country\u2019s economic recovery. To do this, it also needs to ensure the support and understanding of the government,” he said.<\/p>\n