The South African Breweries (SAB) called for the government to cap increases in excise tax on liquor. Ahead of the National Budget Speech this Wednesday, SAB will be highlighting the importance of the sector in South Africa’s Covid-19 recovery plan. SAB wants the government to move away from increasing the cost of liquor going above inflation.
Driving up the price of liquor in an attempt to deter alcohol abuse, is likely to backfire due to the increase of illicit trade. Just the wine industry alone generates 265,000 jobs, and grosses R55 billion to the GDP. Just like with any other good or service, people will seek out a cheaper alternative.
In 2021 the excise tax was increased by 8%, an additional increase in just one year would be a hit to a still recovering industry.
By: Alexandria Gregson
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