Liquor industry seeks Covid-19 tax relief

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Liquor industry seeks Covid-19 tax relief

By Edward West Time of article published 1h ago

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CAPE TOWN – THE LIQUOR industry wants the government to again defer tax payments by the industry through the current phase of the Covid-19 pandemic, until the ban on sales is lifted.

The South Africa Liquor Brandowners Association (Salba) said yesterday that the industry and its value chain faced “an enormous financial crisis” through the current ban on liquor sales, and the industry's capacity to make tax payments was “severely constrained.”

The alcohol industry pays SA Revenue Services (Sars) an average R2.5 billion per month in excise tax contributions for locally produced and imported products.

Alcohol excise tax is imposed at the point of production, which means alcohol companies have to pay the excise tax on end products in their warehouses and which cannot be sold due to the current indefinite prohibition of sales.

The industry was granted deferment of at least R5bn in excise tax payments for July and August 2020, when the government initially banned alcohol sales. The industry had since honoured their payments to Sars from October 2020 when sales were back in operation.

Salba chief executive Kurt Moore said that the industry had appealed to the government to enter into discussions on reasonable and viable alternatives to the ban. This strategy included allowing limited sales for home consumption, which would have a limited impact on the current wave of infections.

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