Continued booze ban threatening international trade, tourism
A leading economist warns that beside the massive sin tax loss, the booze ban also cause SA to miss the boat on the resumption of global trade and tourism.
Picture for illustration purposes. Picture: Michel Bega
Amid calls for President Cyril Ramaphosa to reopen the economy, an economist warned that government faced a double whammy should it continue with the Covid-19 lockdown.
Lost “sin taxes” would never to be recouped, with the country having missed the global trade boat.
Professor Peter Bauer from the University of Johannesburg School of Economics was commenting on billions lost in revenue due to the ban on the sale of tobacco and alcohol products.
“Hoping to recoup revenue from so-called sin taxes is now too late because it is money that has already gone down the drain. When we are in lockdown, we are losing that income by not allowing alcohol and cigarette sales,” said Bauer.
“South Africa has already lost billions of rands in taxes that would have been collected from smoking and from alcohol – money we could have used to finance things like hospitals.
“There is urgency that the tobacco and alcohol industries are allowed back into the market.
“There are many supermarkets, wine producers and a number of jobs affected by this ban – quite a loss. It is now urgent for South Africa to open up its economy up.”
Failure to import and export alcohol products reneged on international agreements.
“We are an importer of alcohol from other countries, with agreements signed with European and other countries to import alcohol.
“Reneging on our agreements by no longer importing alcohol products from other countries has now become a trade issue.
“At a time of a weakening currency, the trade relationship with other countries is now on an alltime-low.”
Hardest-hit, said Bauer, was the hospitality, tourism and restaurant industries.
“How do you tell a tourist, don’t come because you can’t buy a beer,” he said. “Alcohol products are very much part of tourism.”
