Liquor producers are calling for a 90-day tax break in light of the extended lockdown level 3 restrictions. The South African Liquor Brand owners Association (Salba) says liquor producers are facing a serious cash-flow problem owing to the alcohol ban and are in need of some urgent relief.
A TAX DEFERMENT WAS GRANTED IN JULY AND AUGUST 2020
Previously the government gave the green light for the deferment of R 5 billion in “excise tax payments for July and August 2020 when the government banned alcohol sales with immediate effect”, explained Salba. Producers caught up on the payments to Sars once the ban was lifted.
They are now requesting a similar kind of action during the adjusted lockdown level 3. According to Salba, producers pay over an average of R 2,5 billion per month to Sars for locally produced and imported products.
END OF ALCOHOL BAN UNKNOWN AT THIS STAGE
SALBA head, Kurt Moore says there is no indication as to when alcohol sales will be allowed again, making it crucial for the government to use all “cost-prevention measures” to ensure the industry survives this latest ban.
The association further supports their point by stressing the financial impact the alcohol ban – introduced in late December 2020 – is having on all facets of the industry, including traders.
“Alcohol excise tax is imposed at the point of production, which means that alcohol companies have a liability to pay the excise tax on end products in their warehouses and which cannot be sold due to the current indefinite prohibition of sales. Apart from the damage to the fiscus, such restrictions also have a far-reaching negative impact on the country’s already precarious socio-economic predicament and the industry’s viability. There is no Temporary Employer/Employee Relief Scheme (TERS) for any of the SMMEs in the sector including taverns, restaurants, and bars”
The South African Liquor Brand owners Association (Salba)
SALBA NOT IN ON SAB COURT BID
Despite their concerns Salba is not party to the South African Breweries’ court bid challenging the constitutionality of the latest ban on alcohol by the government.
SAB on the other end called the legal challenge a last resort for them. They will submit a very similar argument to the one that reversed the cigarette ban, which was presented by British American Tobacco. Both groups feel that the respective bans are “in violation of our human rights”.
Salba says they share the public’s and government’s concern around the continued increase in the number of Covid-19 case and would like to help lighten the burden on the country’s healthcare system.
Salba has further raised its concerns regarding the sale of alcohol via illegal channels. This as three Bloemfontein woman in their twenties died after consuming a home-brewed alcohol concoction in the new year period. Bloemfontein residents are still reeling from the incident, with Pastor Morris Sekgutleng – the man who assisted the group to get to hospital – saying this is a terrible tragedy that has rocked the Turflaagte community. It is yet to be confirmed what ingredients are contained in the deadly concoction.