Africa-Press – Lesotho. Despite the resistance from the alcohol and tobacco retailers on the implementation of the proposed Tobacco and Alcohol Bill, 2020, the Ministry of Finance and
Lesotho Revenue Authority (LRA) had maintained their stance on appealing to the parliament to ensure the bill sees the light of the day. The proposed Tobacco and Alcohol Products Levy Bill was previously met with hostilities by
the alcohol and tobacco retailers. The Ministry of Finance had proposed to impose a 15 percent levy on alcoholic beverages and 30 percent on tobacco products.
The Development and Economic Cluster committee met with the Ministry of Finance and the Lesotho Revenue Authority (LRA) this week to engage the proposed Alcohol and Tobacco
Bill, 2020. The Principal Secretary of the Ministry of Finance Nthoateng Lebona said the high consumption of alcohol and tobacco need to be dealt with seriously.
“You go for health benefits first, because the fiscal are secondary” Lebona said. She said all
relevant stakeholders have been consulted, adding that the bill goes as far back as 2014. The LRA’s acting Commissioner ‘Mathabo Mokoko said the industry is unhappy with the bill.
She said the purpose of the consultation was to alert the industry of the government’s intention to introduce the levies. Mokoko said the consultations were done at
the time following the recommendations from the World Bank. The acting Commissioner said this proposed bill will be phased in, in the form of Value Added Tax (VAT)
and that will be “felt” by the consumer. “As a general principle, the industries are reluctant to pay the taxes,” she charged. She said their compromised position was the imposition of 15 percent.
“They don’t want a compromised position, it’s their way or the highway,” she said adding
that the Southern African Customs Union (SACU) revenue is dwindling. She said the authority needs to be helped with ensuring that the Lesotho alcohol and tobacco
products prices are at par with South Africa (SA), a move which she argues will counter smuggling. Meanwhile, the Maluti Mountain Brewery (MMB) and the alcohol and tobacco retailers were
unsettled at the prospects of the introduction of the proposed levies. MMB Managing Director Sesupo Wagamang argued that these recommended levies will not only
affect their sales but also threaten the loss of many jobs at their company. Wagamang said the MMB profits are likely to decline by 40 percent if the bill
is passed. “I am unable to pay dividends for the first time in 20 years as our profits have halved” he emphasized adding that the lockdown restrictions on
sale of alcoholic products had dealt a blow to the MMB. Wagamang said the pricing at MMB is always below inflation. He further argued that the three-fold
proposed increase will cause the decline in their revenues, saying alcohol is price sensitive. If the levy is not introduced they anticipate to contribute about a billion to the government
coffers. For their part, the Lesotho Liquor and Restaurants Owners Association (LEROA)’s representative Motseki Nkeane during their appearance before the committee requested that the
bill be temporarily suspended. Advancing their argument, LEROA said, in this proposed bill was devoid of consultations adding that even its timing is not appropriate. Nkeane also argued that the business environment is currently not looking well even before the outbreak of the COVID-19.
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