Customs

On 05 May 2014 National Treasury published for public comment a discussion paper regarding the taxation of alcoholic beverages in South Africa. The paper, entitled “Review of the Taxation of Alcoholic Beverages in South Africa”, follows the 2010 and 2012 budget announcements.



According to National Treasury, this discussion document analyses the current excise duty structure for alcoholic beverages since its implementation in 2002, recent developments in excise policy formulation both locally and internationally, and the scope of using the excise duty system to internalise the social external costs arising from alcohol abuse.



Concerns with the current  alcoholic beverage tax regime include the need to update the current benchmarks; anomalies in the ready-to-drink, cider, and alcoholic fruit beverages beverage market; structural changes in the alcoholic beverages market; the appropriate classification and taxation of mixed and fermented alcoholic beverages and the displacement of some lower-priced products into the illegal sector.



Treasury said the proposals contained in the discussion paper should be seen as part of a package of measures aimed at encouraging a more responsible use of alcohol. Other measures include excise duties on alcoholic beverages, limits on the drinking age, restrictions on liquor trading hours, restrictions on alcohol advertising, education targeted at the youth and other groups at risk (eg, pregnant women), better enforcement of laws and regulations to combat alcohol abuse and illicit trade, and higher penalties for drinking and driving.



Written comments should be submitted to Riaan Labuschagne at Riaan.Labuschagne@treasury .gov.za by the close of business on 30 June 2014.