Following the national budget speech tabled by Finance Minister Enoch Godongwana on Wednesday afternoon, liquor traders have reacted.
The traders have welcomed the rise in sin taxes that will impact on the price of alcohol and cigarettes in South Africa.
In its reaction, the Liquor Traders Association said that sin tax increases would boost business growth for the sector.
This comes after the national Treasury as reported by BusinessTech Africa, proposed a 4.9% increase in excise duties on alcohol and tobacco.
Liquor Traders convenor, Lucky Ntimane, said that Finance Minister Enoch Godongwana charted a clear path to recovery for the sector.
While he accepted the price increases, Ntimane said the power cuts implemented by Eskom were countering any growth.
“The growth and sustainability of our businesses, which are the backbone of the township economy, relies heavily on the accessibility and affordability of the goods that we sell,” Ntimane said according to EWN.
“The inflation-related excise duty increases will ensure that we stabilise our businesses and set them on a path to growth.
“We call on the government to supply liquor traders with financial packages that will enable them to access alternative energy sources and keep the businesses running optimally as we protect the over 200,000 jobs that are dependent on the tavern sector.”
BTA reported that Godongwana said the government will raise taxes on cigarettes and alcohol in 2023 but there is a relief for sugary drinks consumers.
The minister delivered his address on Wednesday saying that no major tax developments were being announced for 2023, at least on the budget’s revenue side.
Godongwana said this was because revenue collection for 2022/2024 is expected to reach R1.69 trillion – exceeding the 2022 budget by an estimated R93.7 billion.
However – while this means that tax brackets can be adjusted along with inflation and fuel levies can remain unadjusted for 2023 – it does not mean that so-called “sin taxes” will see the same benefit.
The government is proposing an increase in the excise duties on alcohol and tobacco of 4.9%, in line with expected inflation.
