The liquor industry will ask the tax collector to get a deferral on the payment of more than R5 billion in excise tax for July and August.
This stems from the renewed ban on the sale of alcohol that was unexpectedly announced last Sunday.
The total excise duty that the liquor industry would pay to the South African Revenue Service (SARS) would have amounted to R2,5 billion in July and an estimated R2,5 billion in August.
Sibani Mngadi, a spokesperson for the liquor industry, said in a statement that excise duty is levied during production.
“This means that our industry has an obligation to pay excise duty on the finished products that are in the warehouses, but we cannot sell them due to the ban on sales,” he explained.
An enormous financial crisis is facing the industry and its value chain and the ability to make the payments is severely limited, the statement said.
“The sustainability of the sector, now and in the post-Covid-19 era, depends on the postponement being given or job losses will not be avoided.”
The industry currently supports 35,000 businesses in townships (such as shebeens) and more than 10,000 liquor stores and more than 22,500 labor-intensive businesses, such as restaurants, hotels and wineries.
“The state’s nationwide ban on the sale of alcohol has far-reaching consequences. A more purposeful and nuanced approach is needed and the industry has called on the government to discuss reasonable and viable alternatives. ”
The industry is also concerned about the rise in Covid-19 cases.
According to him, the industry has declared all its willingness to enter into an agreement with the state to promote behavior change over the use of alcohol.