Govt urged to reconsider excise duty on wine, to target pensions instead of hiking VAT

CAPE TOWN - Organisations opposed to the proposed tax increases in the budget said that a tax hike would harm businesses like those in the wine industry.

They also want government to rather target higher tax on tobacco and other harmful products and also plug the shortfall through a government pension fund contribution holiday.

Various sectors and affected parties made submissions during public hearings on the fiscal framework and revenue proposals, which include the VAT increase and other tax proposals.

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More than 20 organisations made written submissions to Parliament’s public hearings into the budget and its tax proposals.

They included those who represented the wine industry, who said that the excise tax on wine would have a negative impact on the industry.

Christo Conradie from SA Wine, an industry non-profit, said that a tax increase on wine should be reconsidered.

"Please consider to adjust the excise tax in line with CPI, not above like the current proposal of CPI plus two percent."

Lisa Higginson of the Budget Justice Coalition said that government should target pensions instead of raising VAT.

"In terms of the details of the Government Employees Pension Fund, as we understand it, it's about R59 billion and that could be added and won't have any impact on pensions."

National Treasury will respond to the various submissions when it appears before the joint committee on Friday.