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Mboweni: I lost the debate on alcohol and cigarette sales

President Cyril Ramaphosa last week said cigarettes would be on sale from 1 May, but this was rolled back when COGTA Minister Nkosazana Dlamini-Zuma said the ban would remain in place.

Finance Minister Tito Mboweni. Picture: @TreasurySA/Twitter

CAPE TOWN - Finance Minister Tito Mboweni disagrees with the continued ban on the sale of alcohol and cigarettes, but said he lost the battle in Cabinet and had to abide by its decision.

Mboweni was responding to questions during a Treasury briefing of Parliament’s finance and appropriations committees and the Standing Committee on Public Accounts.

President Cyril Ramaphosa last week said cigarettes would be on sale from 1 May, but this was rolled back when COGTA Minister Nkosazana Dlamini-Zuma said the ban would remain in place.

“Once Cabinet has taken a decision, those decisions are binding on all ministers. For example, I didn't like the continuous ban on alcohol and tobacco but I lost the debate and therefore I have to toe the line. I know I am losing a lot of revenue in the middle of being under pressure to spend, but nevertheless, that's decision of the Cabinet and I have to fall in line.”

Meanwhile, SA Revenue Services Commissioner Edward Kieswetter told the virtual meeting the ban on the sale of alcohol and tobacco products had so far cost the fiscus about R1.5 billion in lost tax revenue.

“In terms of beer sales, we’ve under-recovered R664 million month to date, in terms of wine we’ve under-recovered almost R300 million, spirits just over R400 million and cigarettes just over R300 million. So year to date, our under recovery from these activities is R1.5 billion and we’re just through the first month.”

Mboweni said he expected government revenue to fall by around 32% due to the lockdown. He said the further downgrade of South Africa by ratings agency Standard and Poor’s on Wednesday was “a big blow” for South Africa as it would likely be thrown out of the JP Morgan World Bank index.