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Alcohol levy boosts Govt coffers 

SHARE   |   Monday, 05 June 2017   |   By Kabelo Adamson
Alcohol levy boosts Govt coffers 

The Government continues to raise millions of Pulas through the alcohol levy, having raised P300m through it in the 2015/16 financial year. According to Botswana Unified Revenue Service (BURS) latest annual report, they collected a massive P325, 465, 000 in alcohol levy during the 2015/16 financial year, a considerable increase from P298, 731 collected the year before. The levy has been in place for over nine years now and was introduced when President Ian Khama assumed the presidency, initially supposedly to curb excessive intake of alcohol by the citizens. Its introduction was met with mixed feelings, with many particularly those in the industry feeling that the levy was a calculated move to cripple the sector. Latest figures, however, show that the amount from the levy continues year after year with the levy now pegged at 55 percent. BURS says the increase in alcohol levy was occasioned by a change in formula for calculating levy including Excise duty on locally produced alcoholic beverages and therefore resulting in an increase in the tax base hence an increase in collections.The other factor that has apparently contributed to the increase, according to the report, was the increase of the levy rate from 50 percent to 55 percent for alcohol beverages with an alcohol content of more than 5 percent. Local brewer Sechaba Brewery Holdings Limited (SBHL) recently announced these developments and hailed them as a breakthrough in a long standing battle with government over the levy. The holding company which runs Kgalagadi Brewery Limited (KBL) has continuously decried the effects of the levy in its operations, subsequently affecting its profit margins on yearly basis. BURS also collects other levies of behalf of government departments, including the tobacco levy which was introduced in the 2014/2015 financial year.

During the latest collection period, the amount from this levy stood at P39.7 million, which is a decrease when compared to collection from the year before which amounted to P44.7 million. Government is expected to continue to rake in millions through levies which are constantly being introduced. The latest is the Tourism Levy which will require all non-SADC visitors to part with US$30, about P300, which will be paid upon arrival at points of entry. Meanwhile BURS, led by Commissioner General Ken Morris, has announced a decline in tax and customs revenue collection, which Morris blamed on weak performance across the mining sector which resulted in a decline of income tax collections from P15.9 billion to P13.8 billion. Overall during the 2015/16 financial year, BURS collected a total of P35.3 billion exceeding the targeted P34.7 billion that has been set by government. But the amount collected is still below of the P37.5 billion which was collected in the previous year which translates into a 5 percent or P2.2 billion decline. In addition of declining income tax, Value Added Tax (VAT) is also said to have contributed to the drop in total revenue collection. VAT fell from P5.907 billion to P5.685 billion. SACU revenues, another important source of revenue of government, have slightly decreased from the year before, coming down from R89.201 billion in 2014/15 to R88.898 during 2015/16 financial year. The SACU revenue pool consists of five countries being Botswana, South Africa, Lesotho, Namibia and Swaziland. Despite the revenue pool declining, Botswana’s share from it stood at R20.039 billion (P15. 818) in 2015/16 compared to R19.276 (P15.691)  in 2014/15, making it the second highest recipient behind South Africa which earned R36.852 billion during the year under review, earning 43.4 percent of the total revenue pool.