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A Bad Day for Craft Distillers in South Africa
First published on Distillique's website 2020 GM Bosman
Today, Friday 17 April 2020, is a bad day for Craft Distillers, as it's the due date for Excise Tax payment on December production - January declaration.
A little known fact about Distilleries in South Africa - even in the broader Beverage Industry - is that with Distillers, Excise is paid on production, and not on sales like with beer and wine.
Furthermore, it is payable 90, 110 or 130 days after declaration depending on Tariff Code, meaning that even though they are not trading, not producing any product, and not able to sell, SARS still expects them to pay their Excise for December today, and for January on the 20th of May.
Now keep in mind, Excise Tax on Spirits in South Africa is R213.13 per litre Absolute Alcohol. This means that your Craft Gin, Vodka and Rum Distillers (assuming the product is at the minimum of 43% ABV) will need to pay R6 873.00 for every 100 bottles they produced - not sold - produced, over to SARS today.
This while the Government is not ALLOWING them to generate an income due to a total ban on Alcohol Sales during the South African COVID-19 Lockdown. For many of them they were not able to trade properly since March when trading restrictions were first put in place.
There is no relief for them. No postponement.
SARS have said that the Government needs the money, and they must pay. If they do not pay, normal interest and penalties will apply. Now you may think that they should not pay, just incur the penalties and sort it out later - however - many of these SME's have applied for assistance from the Governmental funds, and one of the requirements is that you need to be in good standing with SARS. If they default on their payments, they are now no longer eligible for this assistance.
I already spoke to one of our Distillers who had no choice but to take the money he had put aside to pay his staff at the end of the month, to pay SARS - hoping that in doing so he will at least receive some assistance from Government so that he will be able to pay them.
If you are at all able - and if your local or favorite Craft Distiller has some way for you to assist, either by purchasing online for delivery after Lockdown, or purchasing a voucher - support them, so they can look after their families, staff members, and their staff members' families.
A lot of people are negative about calls to ease Liquor Trade Restrictions, but unlike us and the supporters of Craft, they do not know the people behind the brands. The faces, the personalities, the dreams, the futures and the families that are being affected by the ban on trade.
All of us are in trouble - at one level or another - and not all of us are in a position to help others. But if you are, do so now.
Our thoughts and prayers go out to the Crafters of South Africa. May we all get through this.