Despite pressure on the local economy, the liquor industry continues to make steady contributions to the national revenue against annual target of R24.5 billion set by the National Treasury on Excise Tax on Alcoholic beverages for 2019/2020 financial year.
The Mid-term Budget Statement from National Treasury 2019 indicated that by September 2019, the industry had contributed 51% (R12.5 billion) of the combined revenue estimate of R24,5 billion for beer, wine and spirits for 2019/20 financial year ending February 2020.
The key three categories of liquor were at various levels of contribution with Spirits leading the charge at 60% (R4.1 billion) of its annual excise tax revenue estimate of R6.88 billion. Beer was at 48% (R6.8 billion) of its annual estimate of R13.9 billion. Wine was at 42% (R1.6 billion) of the annual estimate of R3.8 billion.
The Excise Tax estimates are set using the National Treasury policy framework which puts the tax target as percentage of average retail selling price for each category of liquor, adjusted annually against inflation and other factors. The excise tax target is currently:
R65.84 per 750ml (48% of average retail price) for Spirits,
R2.08 per 340ml (35% of average retail price) for beer
R3.15 per 750ml (23% of average retail price) for still wine and R10.16 for sparkling wine.
(Percentage Targets include VAT)
To sustain the overall contribution of the liquor industry to the economy (from agriculture to primary production as well as marketing, sales and distribution) over and above the R24.5 billion annual input into the national fiscus, Government should consider an inflation only increase to the Excise Tax for alcoholic beverages for the Budget 2020/21.
The industry is committed to play its role in the efforts to promote growth and investor confidence to the economy of our country. These measures should include the reduction of the national debt to GDP ratio through limiting national expenditure, efficient collection of existing taxes and addressing the problem of tax evasion as a result of illicit trade.
The industry estimates that at least R6 billion is lost from the national fiscus per annum as a result of illicit trade in alcohol. Similar activities have been reported in other sectors of the economy as well. SALBA is committed to work with government and law enforcement to address this matter.
Sibani Mngadi (Mr), Spokesperson for SALBA