South African Institute of Taxation concerns over the country’s excise duties on beer...
The South African Institute of Taxation has raised concerns over the country’s excise duties on beer, suggesting that the current tax levels may negatively impact consumers, particularly those with lower incomes and potentially reduce government revenue.
SAIT CEO Keith Engel noted that the excise duties on beer have exceeded the thresholds established in South Africa’s own excise policy. Engel says, “When you’re looking at excise taxes, they’re really not an effective way of stopping the excess stuff because those people will just continue to do whatever they want to do regardless. So, if you tax even more, people will just go to cheaper forms or what they do is they go to illegal distilleries, or they go off- market.”
Engel cited similar patterns observed during COVID-19 restrictions, where high excise duties drove consumers off-market, impacting legal sales and revenue. He added, “So it really isn’t that effective, there is a way of doing it and generally excise taxes across the world are really a luxury taxes, so the question here is the limit, the policy can be effective but it has got to make sure that it doesn’t go too far.”
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