While the first two alcohol bans are said to have led to the closure of 80 wineries and 350 producers, the latest ban has seen more wine farms are on the market and for sale go up. Picture: Ian Landsberg/African News Agency (ANA).
Wine industry to continue with court case to mitigate possible future alcohol bans
By Tshego Lepule
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Cape Town - Despite the partial lift of the alcohol ban, a wine organisation is forging ahead with a court application to pre-empt the impact of future bans as the industry faces years of recovery from the financial blow.
Vinpro approached the Western Cape High Court on January 27, with an urgent application to lift the ban on the sale of alcohol and was due to have the matter heard this Friday.
Daily Maverick 168 weekly newspaper.
South Africa is experiencing an exacerbation of illicit trade at a time when the economy is at its weakest.
“Unemployment is at 31%, poverty levels are more than 50%, youth unemployment is higher than 50% and our inequality levels in society are the most unequal in the world. When you add illicit trade to that picture, the situation is increasingly dire,” said Busi Mavuso, chief executive of Business Leadership SA.
She was speaking at a webinar organised by Business Leadership SA on illicit trade.
Mavuso said the ban on tobacco alone translated to a loss of R35-million a day for the fiscus. “Our national budget deficit is more than R350-billion. With businesses closing down and thousands of job losses, South Africans are looking at government to assist with stimulus packages to help businesses rebuild and survive. In that environment, the loss of fiscal revenue and tax revenue could not have come at a worse time.”
Members of the Hawks seize illegal cigarettes. Image: SAPS.
The banning of alcohol and tobacco during lockdown has opened the door for the illicit trade of goods, but when people could buy booze and cigarettes again, not all of them returned to the legal market, but kept buying on the black market, costing the country billions in lost revenue. The main obstacle to addressing the illicit trade in South Africa was the fact that the state was not capable of stopping it because state capture had weakened the justice system to such an extent that illicit trade could grow faster, said Busi Mavuso, chief executive officer (CEO) of Business.
Business for SA (B4SA) is campaigning for the government, manufacturers, retailers and consumers to recognise that the growth of the illicit economy – at a similar rate to the legal economy – is a major problem. State capture weakened state entities; Covid-19 rules had the effect of fuelling illicit trade in tobacco, alcohol and other sectors. Listen to anti-crime and tax evasion activists share the granular detail of how businesses that operate outside the law are causing significant damage to the economy. – Jackie Cameron
Yusuf Abramjee on the key issues facing the SA economy:
We have to have an education process where we educate these traders to say, ‘if you’re selling cigarettes for under R20, you are breaking the law – you are not paying your taxes’. That is why I think the time has now come, for government to introduce a minimum price on items like a packet of cigarettes – maybe 30%, 35% or 40% more than the minimum collectible taxes.
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Inspectors from the SA Revenue Service should be physically present where cigarettes are produced, says Yusuf Abramjee, founder of Tax Justice South Africa.
For every pack of cigarettes sold in SA, at least R20.01 should be paid in taxes, but many are sold for well below this price.
A black market for cigarettes is still thriving, despite the ban of the sale of tobacco products being lifted in August last year.
Officials from the SA Revenue Service (SARS) should be physically present in cigarette factories in South Africa to ensure that taxes are paid and illegal products don t enter the market.