South Africa

SA's booze industry seeks tax relief after new sales ban

SA's booze industry seeks tax relief after new sales ban

SA’s alcohol industry, reeling under a renewed liquor sales and distribution ban since the end of December, on Tuesday called for a deferment of excise duty to stave off a wave of business closures and job losses.

President Cyril Ramaphosa extended an existing countrywide ban on alcohol sales and distribution on Monday, saying it has helped to reduce trauma cases in hospitals and keep staff and facilities available for Covid-19 patients.

He did not give a date on when the ban would be lifted.

“The SA wine industry faces a grim picture of business closures, job losses, downward price pressure and structural damage to subsectors,” Vinpro, which represents 2,500 local wine producers, said in a joint statement issued by several alcohol associations in the country.

The government  banned the sale of alcohol for more than four months from April last year, but later deferred R5bn in excise taxes for July and August.

The country’s alcohol industry pays an average R2.5bn per month in excise tax, the statement said, adding that the ban has left the industry in a “precarious” state.

“The industry faces an enormous financial crisis  and its capacity to make these payments is severely constrained," said the SA Liquor Brand owners Association, which represents companies such as Distell Group, Diageo Plc, Pernod Ricard and others.

The alcohol ban was introduced in December for the second time in nine months as coronavirus infections spiked in the country.

SA, which has recorded more than a third of all coronavirus cases on the continent, reported record-high daily new cases last week, with total cumulative infections topping 1.2m and more than 33,000 deaths.