Covid-19: Alcohol, cigarette ban costs SARS R1.5bn in single month

Covid-19: Alcohol, cigarette ban costs SARS R1.5bn in single month

- The South African Revenue Service has reported an underrecovery of over R1.5 billion

- This loss is solely due to the current alcohol and cigarette ban during the month of April

- SARS commissioner Edward Kieswetter says that he does not support the current prohibition

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The SA Revenue Service has reported a loss of over R1.5 billion purely resulting from the current ban on alcohol and cigarettes during the month of April.

BusinessLIVE reports that commissioner Edward Kieswetter revealed this hefty underrecovery of tax revenue on Thursday.

On Wednesday, Co-operative Government and Traditional Affairs Minister Nkosazana Dlamini-Zuma revealed that Level 4 lockdown would not permit for the tobacco ban to be lifted, despite President Cyril Ramaphosa signalling otherwise.

READ ALSO: Cigarette ban: Lawsuits loading as over 335 000 citizens sign petition

Finance Minister Tito Mboweni says that tax revenue for the current financial year could be 32% lower if not more at a time when government expenditure is already taking severe strain.

Mboweni went as far as to say he did not support the current ban on cigarettes and alcohol but explained that as a member of cabinet he has to accept the decision.

“I lost the debate and have to toe the line."

Kieswetter explained that the underrecovery on certain alcohol products for the month of April is as follows-

  • Beer- R664 million
  • Wine- R300 million
  • Spirits- R400 million
  • Cigarettes- R300 million

Kieswetter also recognised that the bans had encouraged the sale of illicit cigarettes, a cause for great concern. reported that the decision to extend the ban on cigarettes has been widely criticised, with tobacco groups vowing to challenge the restrictions in court.

In addition to the lawsuits, over 350 000 citizens signed a petition compelling the government to lift the ban.

Health Minister Dr Zweli Mkhize explained that the decision to extend the ban was based largely on health concerns.

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