Alcohol industry must pay R5 billion excise tax for booze it made but can't sell
The alcohol industry is on its knees after the government re-banned the sale of alcohol without any warning or consultation.
The government has failed to provide enough hospital beds to accommodate for the spiralling number of Covid-19 infections, moving it to ban alcohol in the hope of freeing up Intensive Care Unit (ICU) beds.
South Africa’s dwindling kitty is short R3.5 billion (and counting) in lost tax revenue while 120 000 people in the alcohol industry have lost their jobs during the first part of the lockdown.
The current ban will destroy 13 000 jobs in each week it continues, according to Distell CEO Richard Rushton.
About one in five wineries have permanently shut down.
The industry is begging the government to defer R5 billion in taxes due in July and August.
The Money Show’s Bruce Whitfield interviewed Sibani Mngadi (Spokesperson at South African Liquor Brandowners Association), Solly Kramer (CEO at Norman Goodfellows) and Lucky Ntimane (Convenor at National Liquor Traders Council).
The minute you produce you become liable for excise tax… If we get this relief, we hope it will minimise the impact on employment…Sibani Mngadi, Spokesperson - South African Liquor Brandowners Association
We lost R20 billion in revenue. The government lost R3.4 billion in excise tax…Sibani Mngadi, Spokesperson - South African Liquor Brandowners Association
It’s been devastating! … We might have to lay off over 200 people… It’s nearly a million South Africans who rely on the alcohol industry…Solly Kramer, CEO - Norman Goodfellows
Illicit trading – we’ve seen it with tobacco. There’s so much illicit alcohol going around…Solly Kramer, CEO - Norman Goodfellows
It’s been tough for our members. Many won’t be able to open when this ban is lifted… they can’t bear the brunt. It’ll be the end of the tavern industry as we know it.Lucky Ntimane, Convenor - National Liquor Traders Council
Illegal alcohol dealers celebrated the President’s speech… The issue is around consumers who aren’t responsible… we need to face up to it.Lucky Ntimane, Convenor - National Liquor Traders Council
Listen to the interviews in the audio below.
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