JOHANNESBURG - Charlene Louw of the Beer Association of South Africa is pleading for a tax reduction for low-alcohol beers
She says a successful taxation policy should take into account economic realities, consumer behavior, and the sustainability of the industry.
This as the burden of excise tax on beer has surpassed the government's targeted 23% for six years straight leading increased costs and a boom in the illegal alcohol market.
READ | Police on the hunt for Pretoria nightclub attack suspects
"The impact of [ excise tax] on the industry is evident in the sense that the cost of manufacturing is rising [taking into account] electricity prices that are going up a[as well as the] cost and availability of water.
"Essentially it is becoming more expensive for businesses to manufacture particularly in the beer industry. The implications of these particular manufacturers are highly strained in terms of manufacturing costs.
"In addition to that you have a consumer who is highly strained and is unable to afford legal alcohol. They then will divert to illicit alcohol which sadly is not safe for human consumption," she said.
Louw argued that the government loses money from the illicit alcohol trade as it does not bring in any revenue.
She argues that a progressive tax would see a predictable adjustment.
"The government has been very inconsistent in its application of the excise tax system. They have not followed their guidelines in applying their excise tax regime."
"So what we are asking for is to link it to inflation that way as an industry there is better planning around manufacturing, pricing, and investment," she said