Wednesday, September 30, 2020

Government to hike alcohol levy

The Botswana government is planning to increase the 30% alcohol levy introduced five months ago.

President Lt Gen Ian Khama told the Special Economic Committee to Cabinet on Wednesday that the alcohol levy will be revised upwards. Office of the President spokesperson, Jeff Ramsay, would not comment on whether the announcement was made at the Economic Committee to Cabinet, saying proceedings of “the Economic Committee to Cabinet are confidential”.

Ramsay, however, added that, “the review of the alcohol levy is a process and at this point there is nothing new on the alcohol levy”.

The planned increase in alcohol levy is expected to start another round of war of words between government and the BSE listed SECHABA Breweries. After the alcohol levy was imposed on October 30, KBL issued a press statement that, “We have received with shock and disappointment the resolve of government to proceed with the alcoholic beverages levy, albeit at a lower level of 30%. We note that Government has somewhat reconsidered its position. Notwithstanding, we remain resolute in our view that the levy in whatever form, shape or magnitude will not resolve the problem of alcohol abuse,” KBL said in response to government decision.

In fact, the brewer says government decision amounts to a total rejection of the proposals the private sector submitted to government under the auspices of BOCCIM (Botswana Confederation of Commerce Industry and Manpower), chief of which was the immediate setting up of a P20 million fund that would help mitigate the harmful effects of alcohol consumption.
Under this arrangement, KBL had committed P13 million to kick-start the fund.

“Regrettably, we have been informed that government has not accepted our proposal and has instead reverted to a levy of significant proportions at 30%. We are concerned about this and the stated threat of a possible increase in the levy.”

KBL says the levy of any amount carries with it significant social and economic consequences, including but not limited to loss of jobs, losses on the Botswana Stock Exchange, negative impact on inflation, illegal cross-border smuggling of alcohol, the production and sale of potentially harmful illicit and counterfeit products as well as other associated crimes while still not addressing the noble aim of reducing alcohol abuse.

In a somewhat veiled threat, KBL maintains that not only is the decision to introduce the levy unsustainable in the long term, there also are human rights connotations attached as well since the government’s decision effectively denies the people a right to choose.

“While we know that our beer adds to the enjoyment of life for the overwhelming majority of our consumers, we believe that alcohol consumption is for adults and is a matter of individual judgment and accountability.”

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