Africa-Press – Lesotho. The proposed Tobacco and Alcohol Products Levy Bill was met with hostilities by the alcohol and tobacco retailers yesterday. These developments transpired yesterday during the sitting of the Portfolio Committee on the
Economic and Development Cluster at the National Assembly. In its attempts to exploit revenue streams, the Ministry of Finance had proposed to impose a 15
percent levy on alcoholic beverages and 30 percent on tobacco products. “… the Bill is expected to increase revenue in order to provide for developmental programmes,” reads
the Bill’s preamble. The Chairperson of the committee, Hon. Mahooana Khati said, despite Basotho facing financial constraints, they are able to buy alcohol, citing the time during the lockdown
when the government had imposed moratorium on the sale of these products they were sold at exorbitant prices and people still bought them. The Lesotho Liquor
and Restaurants Owners Association (LEROA)’s representative Motseki Nkeane requested that the bill be temporarily suspended. Advancing his argument, he said in this proposed bill was devoid of consultations with the
interest parties. Nkeane also argued that the business environment is currently not well, even before the outbreak of the COVID-19. He said taverns fall under the entertainment based industry, and the allocated operating hours
are not flexible as on weekends they do not operate, a time when he said many consumers are available. Nkeane said the move will affect mostly the legally operating businesses and the black market
will not feel the pinch, adding that the latter is not regulated and therefore goes unchecked. He said they protect the lives of Basotho, citing that they encourage their clients to drink
responsibly. Reflecting on the argument that many road accidents are fueled by alcohol consumption, Nkeane rebutted those, saying there are no statistics to support those claims.
One of the members of the committee, also shared similar sentiments challenging the committee to do further consultations. Another member of the committee, Hon.
Halebonoe Setšabi argued that it is not an opportune time to introduce those levies as they will affect the law abiding businesses while unlicensed operators will not be affected in their sales.
“Let’s go back to the drawing board,” he said.
‘Manthethe Senyane also from LEROA, said if the alcohol prices hike, the consumers will resort to
traditional beer, which she argues is “dangerous”. Maluti Mountain Brewery (MMB) Managing Director (MD) Sesupo Wagamang said this recommended increment will not only affect their sales but also threatens the loss of many
jobs. Wagamang showed that there is a 40 percent decline in profits of the MMB. “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. He 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. If there is no levy they anticipate to contribute about a billion to the government.
He argued that alcohol is price sensitive. “You increase prices, people drink less. ” The biggest cost he said is manufacturing in their business. The 61 percent
shareholding of the MMB is owned by the government through the Ministry of Finance and Lesotho National Development Corporation (LNDC). The Ministry of Finance had already appeared before the committee.
For More News And Analysis About Lesotho Follow Africa-Press
