The South African Liquor Brandowners Association (Salba) yesterday called for the South African Revenue Service (Sars) to provide extended payment terms on the excise duties currently due to the tax organisation as the latest 14-day ban of alcohol sales declared by the government hits the industry.
Salba represents major alcohol manufacturers, including Distell, Heineken, Diageo, Pernod Ricard and DGB.
It requested that should the government decide to extend the current ban which expires on Sunday, that the deferment would be applicable for the whole period until the ban was lifted.
Salba chairperson Sibani Mngadi said the industry estimated that it would lose retail sales revenue of R6.1bn as a direct result of the current two-week ban, the equivalent to 4.1 percent of projected sales values for 2021, and the potential direct loss in gross domestic product was estimated to be R3.8bn.
“Government will lose an estimated R3.6bn in direct tax revenue (excluding excise tax) for the two weeks (equivalent to 0.3 percent of national tax revenue, excluding excise taxes, for 2020), and the potential direct excise tax income lost is estimated to be R1.5bn (equivalent to 2.7 percent of excise revenue in 2021),” said Mngadi.
He said one of the few survival options for the sector to avoid a short-term liquidity challenge was to hold back on accounts payable, of which monthly excise tax payments to Sars were a big chunk.
“The industry and its entire value chain are facing an enormous financial crisis, and its capacity to make these payments is severely constrained. Current market conditions have also made it difficult for members to secure short-term funding, ” he said, adding that the current 14-day ban put an estimated 4 604 jobs at risk.
BUSINESS REPORT ONLINE