Cape Town - The Beer Association of South Africa (Basa) has lobbied the government for a uniform tax regime for the alcohol industry.
Basa noted a disparity in the application of excise duties within the alcohol industry, which has impacted the beer industry in particular, it said.
It made its submission to the National Treasury and the SA Revenue Service (SARS) on the 2022 Draft Rates Bill and the 2022 Draft Taxation Laws Amendment Bill on behalf of its members, the Craft Breweries Association of South Africa, Heineken South Africa and South African Breweries.
“While beer is taxed at an excise duty based on the LAA/ABV (measure of alcoholic strength), wine is taxed at a rate based on litres irrespective of the ABV.
“This means that the excise duty liability for wine remains at R4.96 irrespective of the ABV, which ranges between 4.5% and 14%.
“In contrast, the excise duty liability for beer is based on the ABV calculated at a rate of R121.41 per litre absolute alcohol.
“This disadvantage becomes apparent on beer products above 4.5% ABV with the highest prejudice experienced by the craft beer sector where beer ABV is generally around 7%. At this point beer is taxed R3.54 more than wine with the same ABV.
“Second, while excise duties are currently intended to be a consumption tax, wine is also at a distinct advantage in light of excise duties on beer being due within an average 4.5 months prior to consumption, whereas the duties for wine are due within an average 36 months to actual consumption, since wine is able to be consumed and often best consumed after considerable ageing. The same advantage is also enjoyed by most spirit products.”
Basa said it would also be writing to Finance Minister Enoch Godongwana to request a meeting to discuss proposals and create a uniform tax system of alcohol products in the country.
Cape Times