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Alcohol sector awaits Mboweni response to request to defer excise duty payment

The alcohol industry said that the renewed ban of alcohol sales with immediate effect had resulted in the sector having no choice but to apply for a deferment.

Picture: Pixabay.com

CAPE TOWN - The alcohol industry will have to wait for an announcement from Finance Minister Tito Mboweni on its request to defer R5 billion in excise duty payments.

More than a week ago, President Cyril Ramaphosa re-imposed the ban without any prior warning to the industry.

The total excise due so far is around R5 billion.

The alcohol industry said that the renewed ban of alcohol sales with immediate effect had resulted in the sector having no choice but to apply for a deferment.

The industry said that their entire value chain was facing an enormous financial crisis and its capacity to make these payments was severely constrained.

The South African liquor industry spokesperson Sibani Mngadi said that the opportunity to sell products was taken away as a result of the ban, hence the request to government.

“Alcohol excise tax is imposed at the point of production. This means our industry has a liability to pay excise tax on end products that are in warehouses and cannot be sold,” Mngadi said.

He added that once the alcohol sales resumed, they could make the payments as per normal.

Meanwhile, National Treasury confirmed that it had received the industry’s submission, however, it said that any changes to the tax system could only be announced by Mboweni.

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