Paying for ‘sins’

Paying for ‘sins’

MASERU – GET ready to pay more for your ‘sins’.
In the next few weeks quenching your thirst with a glass of beer, wine or brandy will cost you more.
The bearer of that bad piece of news was Finance Minister Dr Moeketsi Majoro in his budget speech on Tuesday.
He is taxing you more for your liquor habits because he wants to raise money to cover the gaping holes left in the budget by the drop in collections from SACU and other taxes.

So in the next week you will pay 15 percent more for every alcoholic drink you buy. If you don’t want to pay that you better get sober fast or find an alternative pronto.
For those with a nicotine addiction it’s time to quit for the sake of both your health and your pocket because a puff will soon cost 30 percent more.

Think twice before you floor the accelerator because soon there will be a half percent levy on your petrol and diesel.
Cut the chatter on the phone because Dr Majoro has just announced an additional three percent Value Added Tax (VAT) on telecommunication tariffs.
That means you will pay more to speak on the phone, browse the internet and even chat on your social media.
The minister hinted that over the next few months the government will review fees and charges that have remained stagnant for years.

Although he was not specific it is possible that he could be looking at fees for services like licences, civil registration and vehicle registration.
He could be looking at the traffic offence fines that are notoriously low.
It’s possible that there might be a massive jerk up in the fines for other offences.

The Maluti Mountain Brewery (MMB), Lesotho’s largest and only beer brewer, is already bracing for the expected downturn in demand for alcohol.
In a statement released yesterday, MMB said the price of alcohol would increase by up to 22.4 percent excluding necessary inflationary cost increases.
The MMB said it is also worried because there is already excise increase of 7.4 percent applicable to all Southern African Customs Union (SACU) members.
“This levy will likely have a negative impact on its business and the liquor industry as a whole,” MMB says in the statement.

As one of the country’s largest companies, MMB remains a significant contributor to the country’s economy through taxes and employment.
The company said it might have to cut some jobs as it reviews the cost structure of the business to remain viable.
Sesupo Wagamang, the Managing Director, said there are a number of implications associated with the introduction of this levy, “many of which will put our business in an unfavourable position”.
“The most important of which is the likelihood of consumers switching to informal alcohol and the increased opportunities for smuggling, which is contrary to the government’s goal with this levy,” Wagamang said.
He said raising product taxes does not guarantee increased tax revenue since this assumes that customers will retain their previous consumption patterns.

“A preventative strategy largely based on taxation will be less effective in countries where consumption of illegal or informally produced alcohol is more widespread or where it is cheap and easy to cross the border to buy alcohol at a lower price.”

A 2018 research by Euromonitor International in 2018 found that seven African countries lost US$1.7 billion (about M23.8 billion) in tax revenue in 2017 due to the illicit trade in alcohol.
The research also found that legal alcohol is on average 42 percent more expensive that illegal alcohol in South Africa and Zambia. The reason, the research noted, was high increases in excise taxes.

Lemohang Rakotsoane

Previous Majoro’s maths headache
Next Opposition raps budget

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