Castle, Black Label maker SAB pleads for tax break

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South African Breweries has asked the government for an excise tax break
South African Breweries has asked the government for an excise tax break
Jacques Stander

South African Breweries (SAB) has asked government not to increase the industry's excise tax, following months of bans on the sale of alcohol.

The maker of Castle and Carling Black Label and made its plea ahead of Finance Minister Tito Mboweni's budget speech this month. In a series of social media posts, the beer maker said the sector's value chain supports 22 300 jobs in the agricultural sector and procures products from 1 000 farmers. The alcohol industry has been affected by the three liquor sales bans government imposed between 2020 and this year, to limit trauma cases at hospitals and keep beds free for Covid-19 patients, with the latest being lifted earlier this month.

Alcohol producers pay the South African Revenue Service about R2.5 billion in excise duties for imported and local products and were given a 90-day reprieve last year after not being able to trade, but SAB says any increase of the tax this year will have an impact on the sustainability of the industry and the economy.

In 2019, the industry contributed R72 billion to the fiscus through VAT and excise tax, but not being able to trade resulted in the government losing 28% of the industry's excise tax contribution - reducing it from R47 billion in 2019/20 to R34 billion in 2020/21. 

SAB has cancelled investments valued at R2.5 billion because of the ban and is taking on the government in court to challenge the constitutionality of its decision, saying that it has 165 000 out of the one million livelihoods supported by the industry have lost their incomes. 

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