THE National Assembly has finally approved the controversial Tobacco and Alcohol Levy Bill, 2021.
The Bill has since been referred to the Senate for further deliberations and if approved, it will then be taken to the King for royal assent before it becomes law.
The proposed law will result in the implementation of a 30 percent levy on tobacco products and a 15 percent levy for alcohol.
Should this happen, drinkers and smokers will be forced to pay more for their favourite products as industry players are likely to pass on the costs to consumers.
The Bill was initially tabled in March 2020 by then Finance Minister, Moeketsi Majoro. At the time, Dr Majoro said the ‘sin taxes’ would boost government revenues by at least M200 million annually.
“After having read the Alcohol and Tobacco Levy Bill, 2021 for the third time as recommended by honourable members, I now declare this Bill to have passed,” the deputy speaker of parliament, Lebohang Ramohlanka, said on Tuesday.
Before its approval, Small Business Development, Cooperatives and Marketing Minister, Machesetsa Mofomobe, said he supported the introduction of the levies as this would deter the excessive consumption of alcohol and tobacco.
Smoking and drinking placed a heavy burden on the country’s health sector, Mr Mofomobe said.
‘’Previous finance ministers have spoken about the strain that alcohol and tobacco have had on the economy. The Health ministry has always advised the public on the benefits of good health and the hazards of alcohol and smoking. We have had countless road accidents due to drunken driving. Alcohol abuse has also led to violent crimes including murder,” Mr Mofomobe added.
The outspoken minister stunned fellow legislators when he said that four of his friends who were in the house were excessive drinkers. However, the deputy speaker of parliament quickly called him to order and told him that it was wrong to label other MPs as drunkards.
He ordered him to withdraw his utterances, which he did.
Finance Minister, Sophonea Shale, said the proposed levies would help curb cancer-related deaths and reduce the strain on government finances.
Stakeholders in the alcohol and tobacco industries have previously condemned the Alcohol and Tobacco Levy Bill.
Among those who opposed the levies were Maluti Mountain Brewery (MMB) who said they would be detrimental to the country as hundreds of jobs could be lost.
MMB said the government would instead lose dividends and tax revenue as an increase in alcohol prices would mean a sharp reduction in sales volumes and an increase in the smuggling of beverages from neighbouring South Africa.
Qalo legislator, Thabang Kholumo, said the new levies would increase poverty in the country.
“Value Added Tax is already 15 percent and introducing new levies will add another burden on drinkers and smokers.
“A new alcohol levy will weigh hard on drinkers who still have to support their families. The government should seek other ways of raising funds and leave drinkers and smokers alone,” Mr Kholumo said.