South Africa’s approach to excise adjustment should be changed to a fixed excise rate in line with the three-year inflation forecast in the 2021 medium-term budget. This was proposed by Ms Fatsani Banda, an economist and excise specialist employed by South African Breweries, during public hearing hosted by the Standing Committee on Finance on Wednesday morning. The hearings are to give members of the public and interested organisations an opportunity to comment on the draft Tax Administration Laws Amendment Bill (TALAB) and Taxation Laws Amendment Bill (TLAB).

Ms Banda proposed that TALAB should change the excise adjustment approach in order to create certainty in the excise tax system. She further proposed that the current tax system based on alcohol volume in beer and spirits should also be applied to the full alcohol category. 

Her proposal was also echoed by Ms Patricia Pillay from the Beer Association of South Africa. Ms Pillay proposed that the initiative by beer makers to ensure lower levels of alcohol by volume (ABV) should be recognised as an act of social responsibility and should receive tax incentives because of this.

Commenting on TLAB, the Chief Technology Officer from Arcelo Mittal, Mr Werner Venter, said that copying of carbon prices from other jurisdictions may be detrimental for the steel industry. “Steel will play a very important role in future adaptation phases and from this perspective it is important that our ability to produce this material is maintained,” said Mr Venter.

The committee will consider all submissions during its deliberation on the two Bills.

Justice Molafo
14 September 2022