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- The beer industry wants government to tax alcoholic beverages according to the level of alcohol by volume and not at the same rate across the board.
- The industry is also calling for policy certainty regarding excise taxes so that it can make long-term investment decisions.
- A new study on the beer industry shows that in 2019, one in 66 jobs in SA was linked to economic activity arising from beer.
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South Africa's beer industry has appealed for a "levelling of the playing field" by taxing alcoholic beverages according to the level of alcohol by volume instead of imposing flat taxes across the board.
The Beer Association of SA (BASA) has submitted a document to the SA Revenue Service (SARS) asking that its excise duty policy be reviewed, according to the organisation's chairperson, Patricia Pillay.
"Beer has the lowest alcohol level by volume, yet, 40% of the price of bottled beer consist of excise duties," Pillay said on Monday during the the launch of a new study by Oxford Economics on the economic impact of the beer sector in SA.
Currently, the targeted excise tax burdens for wine, beer and spirits are 11%, 23% and 36% of the weighted average retail prices, respectively.
SAB CEO Richard Rivett-Carnac said at the event that the beer industry has "a massive role to play" to help SA's economy recover, but needed certainty about future taxes in order to better plan any changes to its operating footprint.
"We are willing to put our money where our mouth is and ensure we grow the beer industry in a responsible way. We understand the role of excise taxes, but we need regulatory certainty," he said.
"Over the next three years we will likely have varying increases in excise rates. Huge swings in increases make it difficult for us to plan long term. We need excise certainty so we can make long term decisions, for example about building new breweries. This, in turn, will lead to things like job creation."
Martin Kingston, chairperson of Business for South Africa (B4SA) echoed this sentiment by saying the private sector needs predictable, reliable policy and input so it can be competitive locally and internationally.
"The private sector will only invest long term if there is a predictable environment," said Kingston.
Cobus de Hart, director of Africa Consulting at Oxford Economics Africa, unpacked the results of the new study, which was conducted on behalf of SAB and Basa. It found that in 2019 one in 66 jobs in SA has been linked to economic activity arising from beer - a total of around 249 000 jobs. About R33 billion in goods and services were bought by beer manufacturers from SA companies that year.
The beer sector supported a R71 billion gross value added (GVA) contribution to SA's GDP in 2019, basically stimulating 1.3% of the SA economy. The beer industry made R43 billion in tax payments to government that year - R13 billion from beer manufacturers and R31 billion from selling beer to consumers, retail and hospitality outlets.
