South Africa's treasury department has extended the deadline for residents to provide feedback on the proposed excise tax hike on alcohol products, initially due by December 13, to February 14, 2025. The move comes as the government seeks to curb rising alcohol-related crimes and review its excise tax policy on alcoholic beverages.

The proposal to hike taxes on alcohol beverages has been in motion for some time, with the National Treasury releasing the proposal for the policy review on the taxation of alcoholic beverages in November. The review builds on the 2014 excise tax policy review and suggests adjustments to the current framework, potentially including tax increases on alcoholic beverages.

According to a report by the National Treasury, South Africa's annual liquor consumption reached 4.5 billion litres in 2022, with gin emerging as the most popular spirit, with nearly 40 million litres consumed in 2022. The country has seen a nationwide rise in cases of armed robbery, abuse, and other crimes linked to excessive alcohol consumption and abuse.

Research from WITS University conducted during the COVID lockdown revealed that 33% of adults in South Africa consume alcohol, with 43% of these engaging in binge drinking. The report further noted that among those who drink alcohol (33.2%), 31.4% were identified as having a potentially harmful or hazardous drinking problem, and 18.9% were classified with severe alcohol use.

Analysts have welcomed the idea, saying an increase in the cost of alcoholic drinks will reduce consumption and in turn, curb crime. However, the national liquor dealers have rejected the move, arguing that the decision would benefit illegal traders who were already dodging tax through their backdoor sales.

Lucky Ntimane, convener of the National Liquor Traders Council (NLTC), expressed dissatisfaction with the proposal, stating that it would be a "welcome relief to illicit and counterfeit alcohol producers who will continue with their operations unabated and in an environment where legal alcohol is priced outside of reach for the majority of consumers."

The extended deadline for feedback provides an opportunity for stakeholders to weigh in on the proposed tax hike and its potential impact on the industry and society. As the South African government seeks to address the growing concerns over alcohol-related crimes, the outcome of this policy review will be closely watched.

In the broader context, the move is part of a larger trend of governments around the world re-examining their tax policies on alcohol and tobacco products to address public health concerns and generate revenue. The implications of this policy review will be far-reaching, with potential effects on the economy, public health, and the liquor industry as a whole.