South African Breweries has warned that proposed changes to alcohol excise taxes could raise costs for legal producers and widen the price gap between regulated and illicit alcohol.
The company’s Fatsani Banda told eNCA that the industry was concerned about proposals being considered in National Treasury’s consultation on a new excise policy framework. The warning is the industry’s position in that process and has not been adopted as a government finding.
According to Banda, one proposal could produce a substantial increase in the rate applying to standard beer, while another could allow larger annual increases. SAB says the approach should take account of inflation, household pressure and the competitive effect of cheaper illicit products.
Excise duties are taxes charged on selected goods, including alcoholic drinks and tobacco. Treasury uses them to raise revenue and to reflect the social and health costs associated with consumption. Changes can affect producers, retailers and consumers, depending on how much of an increase is absorbed or passed on.
The consultation gives industry organisations and other interested parties an opportunity to make submissions before the government settles on a final framework. A proposal in a consultation document is not the same as a final tax decision.
SAB also linked tax certainty to investment and employment planning. Its claims about possible job losses and illicit trade remain arguments advanced by the company as part of the policy debate.
EBNewsDaily had not identified a final Treasury decision on the proposed framework in the official information reviewed on Sunday morning. Any eventual change to excise duties would need to be reflected in the appropriate budget and tax instruments.
