The alcohol industry is requesting postponement of excise duty payments until the alcohol ban is lifted, according to the South African Liquor Brandowners Association (Salba) trade association.
In a press release on January 12, the industry pays the South African Revenue Service (Sars) an average of R2 2.5 billion in excise tax contributions a month for locally produced and imported products.
“Alcohol excise tax is levied at the point of production, which means that alcohol companies are required to pay excise tax on finished products in their warehouses that cannot be sold due to the current perpetual ban,” said Salba.
The industry was granted a minimum of R5 billion in excise duty deferrals for July and August when the sale of alcohol was banned with immediate effect.
Salba believed the industry had honored these payments to Sars from October 2020 when sales were back in operation.
“The government has not indicated when alcohol sales will be allowed again. It is advisable that the industry take all possible cost-saving measures to keep them alive: the delay in excise duty payments is a major factor. The industry and its entire value chain are facing a tremendous financial crisis and their ability to make these payments is severely limited, ”said Salba CEO Kurt Moore said.
Salba said the industry has urged the government to start talks on sensible and viable alternatives to the ban. This strategy includes enabling limited sales for self-consumption.