Wine industry gets excise relief
According to Rico Basson, managing director of VinPro - the representative organisation for close to 3600 wine producers and cellars - the increase in excise duty on wine was the lowest in years, which indicated that Treasury responded to an appeal by the industry and revealed a greater insight into the unique challenges facing this industry.
Excise hikes of 6.2% on unfortified wine, 10% on sparkling wine and 12% on brandy were announced. However, the 12% hike in brandy will increase pressure on the sales volumes of this important wine industry segment even further, of which more than 50% of the retail price is already paid to excise and VAT.
"The wine industry plays an important part in job creation, growth and the generation of foreign exchange. We therefore support the strong focus by the Minister on the elements of the National Development Plan, with specific reference to the importance of the private sector's contribution to economic growth," concludes Basson. There is, however, some concern by the industry about the extent of illicit trade and the socioeconomic impact of abuse. The wine industry therefore called on government for a responsible policy framework with focused actions and committed itself to closer collaboration in this regard.
Lee Bromfield, CEO of Core Lending Products at FNB Business says, "It's great to see the commitment that government has shown towards building a sustainable small business sector. The intended investment comes at a crucial time when the small business sector is starting to experience the negative impact of a sluggish economy." He was referring to the R6.5 billion national budget allocation (over three years) and proposed tax relief for small and medium enterprises announced by the Minister.
While being complimentary on government's efforts, he cautions that it is essential to ensure that the investment is utilised systematically to generate maximum return. "South Africa cannot afford to waste a great opportunity to ignite small business growth now. To do this, the relevant departments will need to ensure that the country is able to reap tangible benefits from the investment, such as; accelerating economic growth and contributing to job creation."
Earlier in the year, the bank stated that it had seen signs of distress among many small businesses and it needed to help small business clients who were feeling the effects of rising operating costs and subdued consumer spending.
"One cannot over-emphasise the need for all sectors of society to partner in building an environment where small businesses can thrive. There's an urgent need to enabled small business to play an even bigger role towards economic growth and job creation," concludes Bromfield.
