牛津经济研究院-双重痛苦：南非啤酒生产商和消费者难以预测的消费税负担和高通胀（英）

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DOUBLETHEPAIN

THEBURDENOFUNPREDICTABLE

EXCISETAXES&HIGHINFLATIONONBEERPRODUCERS&CONSUMERS

INSOUTHAFRICA

OCTOBER2024

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TABLEOFCONTENTS

ABBREVIATIONSIV

EXECUTIVESUMMARYV

1.INTRODUCTION1

2.INFLATIONANDTHESUPPLYANDDEMANDOFBEER4

2.1EffectsofInflationontheSupplyofBeer4

2.2EffectsofInflationontheDemandforBeer8

3.THENEXUSOFTAXES,INFLATION,ANDECONOMICGROWTH14

3.1InteractionsBetweenExciseTaxes,Inflation,andMacroeconomicGrowth14

3.2SouthAfrica’sTaxBuoyancy17

3.3ConsumerPriceElasticityofDemandforBeer18

4.EXCISEDUTIESLEVIEDONBEERINSOUTHAFRICA22

4.1DissectingFiscalReceiptsfromExcisableProducts22

4.2EvolutionofExciseDutiesonBeerinSouthAfricaversusCPIInflation23

4.3ResponsivenessofExciseRevenuestoAbove-InflationDutiesonBeer26

4.4TrackingSouthAfrica’sTaxBurdenonBeerinRelationtotheExciseTargets29

5.BENCHMARKINGSOUTHAFRICA’SEXCISEDUTIESONBEER34

5.1ExciseRegimesandInflationintheSelectionofBenchmarkCountries34

5.2EvaluatingSouthAfrica’sExciseRevenueagainsttheBenchmarkCountries40

5.3BalancingtheBruntoftheBurden43

6.CONCLUSION50

REFERENCES54

ABOUTOXFORDECONOMICSAFRICA62

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ABBREVIATIONS

ABV

ATO

AUD

CAD

CAGRCPI

CRA

GBP

GDP

HMRCLAA

mlMRAMURONS

p.a.

PDI

PED

PMI

PPI

ppt

RPI

SAB

TRA

TZS

USD

VAT

WARSPWHO

ZAR

AlcoholicstrengthbyvolumeAustralianTaxationOffice

Australiandollar

Canadiandollar

Compoundannualgrowthrate

Consumerpriceindex

CanadaRevenueAgencyBritishpound

Grossdomesticproduct

His/HerMajesty’sRevenue&CustomsLitresofabsolutealcohol

Millilitre

MauritiusRevenueAuthorityMauritianrupee

UKOfficeforNationalStatisticsPerannum

PersonaldisposableincomePriceelasticityofdemand

Purchasingmanagers’indexProducerpriceindex

PercentagepointRetailpriceindex

SouthAfricanBreweries

TanzaniaRevenueAuthorityTanzanianshilling

UnitedStatesdollarValue-addedtax

WeightedaverageretailsellingpriceWorldHealthOrganization

SouthAfricanrand

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TheBurdenofUnpredictableExciseTaxesandHighInflation

TheBurdenofUnpredictableExciseTaxesandHighInflation

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EXECUTIVESUMMARY

In1643,theUKwasthefirstcountrytointroduceexcisedutiesonbeertohelpfund

governmentexpensesduringtheEnglishCivilWar.Theseindirecttaxeshavebecome

standardpracticeinmanycountrieseversince.Exciseduties,inadditiontovalue-

addedtax(VAT),comprisetheoveralltaxburdenthatisshiftedtoconsumersthroughhigherretailprices.Althoughtheseleviesaimtoincreasefiscalrevenuesanddiscouragetheharmfuluseofproductswithnegativeexternalities,theygenerallyraiseproducer

expensesandcanpotentiallyacceleratemarketinflationinmostcountries.

SouthAfricaimposesanalcoholic-content-basedspecificexciseonbeerproductionasafixedpercentageofthebeverage’sweightedaverageretailsellingprice(WARSP).ThegovernmentleviesandraisesthesedutiesonbeerinSouthAfricanrands(ZAR)perlitreofabsolutealcoholcontent(LAA)towardsofficialtargetsaspertheNationalTreasury’sguidelineseveryyear.TheguidelinetaxburdenforbeeremanatesfromtheNational

Treasury’s2014excisepolicydiscussiondocument,whichreviewedthetaxationofalcoholicbeveragesfromits2002excisetargets.Thesetaxburdentargetsarealsoconfirmedand

adjustmentstothelevelofdutiesmadeduringtheannualdeliveryofthenationalbudget.

Thecountry’sexciseregimeandoveralltaxburdentargetforbeerhavebeenalteredfourtimessince1994/95.Thepreviousoveralltaxburdentargetforbeerwas35%inexciseplusVAT,whichwaslastchangedin2015/16to23%ofWARSPinexcisedutiesonly.Regardless,thegovernmentadjustsexcisedutiesonbeerannuallybyprojectedretailpricesforthe

nextfiscalyearorbytheexpectedconsumerpriceindex(CPI)inflationrate,whicheverishigher,withthevirtuetomaintaintheoveralltaxburdenalignedwiththeNational

Treasury’sofficialguidelines.

Theprincipleofmaintainingtheoveralltaxburdenhas,however,beennegatedamidseveral

excisedutyescalationsonbeerthathavepersistedaboveprojectedandactualinflationoutcomes,aswellasretailpriceincreases.WithoutretrospectivecorrectionsforCPI

outcomes,risingexcisetaxesonbeerhavecreatedconsiderableuncertaintyandexpensepressuresforproducers.Atthesametime,theseduties,alongwithVAT,impairconsumeraffordability,especiallyduringperiodsofhighinflation.Thishasbeenevidentoverthe

pastthreefiscalyearswhenheadlineCPIinflationacceleratedbyanaverageof6.3%p.a.,notwithstandingthatpricesofspecificbasicnecessitiesandinputscostsrosefasterthanthosereflectedinoverallinflationnumbers.Correspondingly,persistentabove-inflation

increasesindutiesaddadditionalpaintothebeerindustryandconsumersinchallengingmacroeconomicandinflationarycircumstances.

TAXES,INFLATION,ANDECONOMICGROWTH

Economicgrowthpositivelyaffectsgovernmenttaxrevenues,althoughtherelationship

betweentaxesandeconomicoutputismorecontentious.Whiletaxationcansupportfiscalstabilityandthefundingofpublicinvestments,excessiveorpoorlymanagedtaxesthatarenotstrategicallyreinvestedcandistorteconomicactivity,discourageinvestment,reduce

disposableincomes,andincreasedeadweightlossesassociatedwithtaxcollectionand

administration.Highinflationsimilarlyharmseconomicactivity,withconsumption-basedtaxesbeingmoreinflationarythanincome-basedtaxes.Therefore,prudentmonetaryand

fiscalpoliciesareneededtomanageinflationwithoutstiflingeconomicgrowthandindustrial

activity,whichincludescarefullygoverningtaxburdens.Althoughbeerexciserevenues

accountedforonly1.1%ofSouthAfrica’saggregatefiscalincomebetween2012/13and

2023/24onaverage,elevateddutiesonthebeveragehaveanoutsizedadverseinfluenceonthesustainabilityofthebeervaluechain,thepeopleemployedtherein,andthe

economicactivityitsupports.

Exciserevenuesfrombeerhavebeenmoreresponsivetoeconomicgrowththan

othertaxes,withanaveragebuoyancyratioof1.8from2013/14to2023/24whenthe

distortiveimpactoftheCovid-19lockdownrestrictionsisremoved.Thisimpliesthatforevery1%increaseineconomicgrowth,excisetaxreceiptsonbeerrosebyanaverageof1.8%.Notwithstanding,excisebuoyancydroppednotablyin2023/24duetohigh

inflationandweakeconomicgrowth,whicherodedtheinflation-adjustedvalueofexciserevenuesandresultedinanegativerealexcisetaxbuoyancyratio.Thissuggeststhat

sharpincreasesinexcisedutiesduringperiodsofhighinflationandweakeconomicgrowthcandampenconsumption,productivepotential,andfiscalreceipts.

INFLATIONANDTHESUPPLYANDDEMANDOFBEER

Risinginputcosts,productionexpenses,supplychaindisruptions,andregulatorychanges

suchasincreasedexcisedutiesdrivesupply-sideinflationwithsignificantimpactsonthe

costandavailabilityofmanufacturedgoods.InSouthAfrica,higherexcisedutiesonbeer

havecompoundedexpensesforbeerproducersduetothehighshareofexcisepayments

(i.e.,around38%)intheirtotaloperationalcosts.Thispressureisexacerbatedbyexcise

dutiesrisingfasterthaninflationandmostotheroperatingexpensesforfirmsinthebeerindustry.Likewise,above-inflationincreasesinexcisetaxes,combinedwiththeaddition

ofVAT,havedrivenupconsumerpricesandfutureexpectationsthereof.Thishas,inturn,

amplifieddemand-sideinflation,affectedconsumerspending,andreducedtheaffordabilityofexcisableproductslikebeer.Despiteincreasingnominalhouseholdincomessince2012/13,inflationhasoutpacedrealwagegrowth,weakeningconsumerspendingpoweronbeer.

Higherproductioncosts,exciseduties,andinflationinSouthAfricahaveincreasedbeerpricessubstantially,witha500mlbottlemorethandoublinginbothpriceandtaxesoverthepastdecade.Risingbeerpriceshaveweighedondemand,withbeerconsumption

increasingbyamere0.8%p.a.onaveragebetween2012/13and2023/24whenthe

disruptiveeffectsofthelockdownrestrictionsareremoved.Afterconstructingaregressionmodeltocontrolforvaryingincomelevelsoverthesametimeframe,theaverageprice

elasticityofdemand(PED)forbeerinresponsetotheimpactofabove-inflationpriceincreasesontheconsumptionofthebeverageisestimatedat-0.88.Thisindicatesthat

a1%increaseinbeerpricesaboveinflationresultsina0.9%declineindemandforthebeverage.ComparedtopreviousPEDestimations,itfurtherdemonstratesthatconsumerscontinuetobeincreasinglysensitivetochangesinbeerpricesandunderscoresthe

complexinterplaybetweenexciseduties,inflation,andconsumerbehaviour,besidestheunintendedconsequencesofunduetaxandpriceincreaseswheninflationishigh.

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EXCISEDUTIESLEVIEDONBEERINSOUTHAFRICA

Since2012/13,excisetaxcollectionsfrombeerhavegrownsignificantly,by159%,toreach

ZAR21.9bnin2023/24.Thebeveragerepresentedashareof34.7%oftotalexciserevenuesin2023/24,thelargestofallexcisableproductcategories.Asaresult,thegovernmentis

disproportionatelyreliantonthebeerindustryforexciserevenues.Thetrajectoryinexcisedutiesonbeerhasalsoevolvedsignificantly,oftenincreasingaboveprojectedinflation,

CPIinflationoutcomes,andretailprices,whichhasledtohigherpricesforconsumers,

elevatedproductionexpenses,andunpredictabilityforbeerproducersintheabsenceofex-postcorrections.Specifically,excisedutiesonbeerroseby114.6%between2012/13and2023/24(CAGR7.2%),whichwas1.5timesfasteronaveragethanthegrowthratesinbothheadlineandbeerCPIinflationof74.8%(CAGR5.2%)and78.3%(CAGR5.4%),respectively,overthesameperiod.

Althoughthegovernment’sexcisecollectionsfrombeerhavegrownremarkablyamid

above-inflationdutyescalations,thisapproachhasbeguntoshowdiminishingreturns.

Whilenominalexcisereceiptsincreasedbyanaverageof9.0%p.a.from2012/13to2023/24,realexciserevenueshavegrownmoreslowlyby3.5%p.a.,andrate-adjustedcollectionsby

just1.7%p.a.(i.e.,ifhistoricaldutiesonbeerremainedconstantatcurrentlevels).Nominalexciserevenuesfrombeermanagedtoincreasebyonly2.4%y/yin2023/24,implying

thatexpectationsforhighertaxreceiptsfrombeermaynotmaterialise.Thisindicates

thatpersistentabove-inflationdutyhikeshavebecomelesseffectiveovertime,leading

toreducedresponsivenessinfiscalincome.Ongoingsharpescalationsindutiescan

adverselyaffectrevenuecollectionsandconsumerbehaviour,drivingsomepeopletowardsotherexcisableproductsortheillicitalcoholmarket.

SouthAfrica’soveralltaxburden(i.e.,excisedutiesplusVAT)onbeerhasrisenacutely

since2012/13:by161.3%(CAGRof9.1%)toZAR33.4bnin2023/24.Consequently,theshareofthisburdenclimbedfromalowof32.0%ofWARSPin2015/16to37.8%ofWARSPin

2023/24.Inotherwords,SouthAfrica’soveralltaxburdenonbeerwas2.8percentagepoints(ppts)abovethepreviousoveralltargetof35.0%ofWARSPduetosustainedabove-inflationdutyincreasesandhigherVAT(since2018/19,SouthAfrica’sVATratewasraisedto15%).

Inparticular,adjustmentstoexcisedutieshaveraisedtheexcisetaxburdenonbeerto

24.8%ofWARSPin2023/24,fromalowof19.8%ofWARSPin2015/16.Inthatregard,theexciseburdenonbeerhascontinuedtotrendabovetheNationalTreasury’stargetof23%ofWARSPoverthepastsixyearsandwas1.8pptsabovethatthresholdin2023/24.Put

differently,ofeverybeerbought,24.8%ofthefinalpricecompriseexcisetaxespaidintothefiscus,whichrisesto37.8%oftheretailpricewhenVATisincluded.Excisedutiesonbeer

havethereforedivergedfromtheofficiallytargetedguidelines,whiletheoveralltaxburdenhasalsogrownfasterthandomesticbeersales,byanannualaverageof1pptoverthepastdecade,amidabove-inflationdutyescalationsandahigherVATrate,disproportionately

affectinglow-incomeconsumers.Thistrendraisesconcernsabouttheimpactofexcisetaxesonbeerproducersandconsumersalikeinahigh-inflationaryenvironment.

BENCHMARKINGSOUTHAFRICA’SEXCISE

DUTIESONBEERTOGLOBALCOMPARATORS

FivecountrieswerechosenagainstwhichtocompareSouthAfrica’sexciseregime:Australia,

Canada,Mauritius,Tanzania,andtheUK.Thesecountrieswereselectedbasedonthe

comparabilityoftheirexciseregimes,beerindustriesandconsumptionpatterns,health

policies,and,particularly,dataavailabilitytoenablethebenchmarkinganalysis.Whilethe

exciseregimesofthebenchmarkcountriesvaryinmagnitude,method,andcomplexity,

allacknowledgetheneedtopreserverealdutiesbyliftingleviesatornearinflation.In

practice,however,theimplementationoftheseregimeshasdiffered.AustraliaandCanadauseautomaticCPIindexationtoadjustexcisedutiesonbeertoactualinflationoutcomes,whichmaintainstherealvalueofthesetaxes.Theyhavealsokeptincreasesindutiesbelowinflationwhenpricepressuresarehigh,afterwhichretroactiveadjustmentsensurethat

thelevelofthesedutiesremainsalignedwithorbelowlong-termCPIinflationtrends.

InMauritius,excisetaxesonbeeraremanuallyalteredinresponsetoeconomic

circumstancesandoftenleftunchanged,whileex-postincreaseshavemaintained

dutiesonbeerslightlyaboveCPIoutcomes.Likewise,theUKmodifiesexcisedutiesonbeerinconsiderationofeconomicconditions,publichealthobjectives,andfiscalneedsbroadlyinlinewithchangesintheretailpriceindex(RPI).Evenso,thecountryhasoftenreducedorfrozenexcisetaxestosupportconsumersandindustriesby

allowingalargeerosioninrealduties.LikeSouthAfrica,Tanzaniareliesonmanual

adjustmentsinexcisedutiesonbeerbasedonprojectedinflation,albeitalsoin

viewofthecountry’soveralleconomicperformance.Tanzania,too,hasoftenleft

dutiesunchanged,followedbyinfrequentleviesaboveinflation.Yet,thecountryhas

maintainedincreasesinbeertaxesnotablybelowpastinflationtrends.Notwithstanding

theirdifferentexciseregimes,totaltaxescollectedfrombeerproducersbyallofthebenchmarkgovernmentshavegrown,eveninthosecountrieswheretherealvalueofdutieshasdiminishedovertimeinconsiderationofinflationoutcomes.

Since2012/13,SouthAfricahasenduredthemostsignificantupwarddisparitybetweenbeerexcisedutiesandinflationoutcomesamongthebenchmarkcountries.Without

retrospectivecorrections,idiosyncraticadjustmentstodutiesbasedonprojectedinflationhaveresultedinsizeabledeviationsfromactualpricepressuresandamplifiedCPI

expectations,especiallyinperiodsofhighinflation.Conversely,automaticCPI-indexed

mechanismsleadtoreliableandpredictablechangesinexciseduties,avertingtheerosionofrealduties,fosteringpolicycertainty,promotingtrustamongthepublicandprivate

sectors,easingconsumerandfirmbudgeting,andminimisingmarketdisruptions.

SouthAfricaishighlyreliantonthebeerindustrytoaugmentfiscalreceiptsfromexcisableproducts.By2023/24,thecountrydependedonthebeerindustryfor34.7%oftotal

exciserevenues,exceedingtherespectivesharesinoverallbeerexcisecollectionsin

Tanzania(22.3%),Australia(8.8%),theUK(6.2%),Mauritius(6.1%),andCanada(3.8%).Thishighlightsaheavyconcentrationonbeerdutiescomparedtotheothercountries’more

diversifiedexciserevenuestructures.Moreover,SouthAfrica’srelianceonbeertaxeshas

grown,contrastingwithmorestableordecliningdependenceintheothernations.Itis

importanttosupporttheviabilityofbeerproducersbyavoidingexcessivedutyescalations,especiallygiventhefeedbackloopsbetweenmanufacturersandthewidereconomy.

AggressivedutyincreasesinSouthAfricahavefaroutpacedmoremoderatechanges

intheothercountries,whichhasthusfarresultedinarelativelyfasterexpansionin

exciserevenuesfrombeer.However,SouthAfrica’sexcisereceiptsareunlikelytoexpandindefinitelygivenabove-inflationdutyincreases.Thegrowinggapbetweennominaland

rate-adjustedexciserevenuesindicatesaprogressivelyweakresponsetodutyescalations

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versusthebenchmarkcountries,riskinglong-termfiscalstability.SouthAfricamayreachaninflectionpointinthenearfuture,wheretheburdenofunpredictabledutyincreasesstiflesindustrygrowthandexacerbatessocio-economicchallenges.Thegovernment,therefore,needstoconsideralternativemechanismsforadjustingexcisedutiesonbeer

tobalancethetaxburdenandsupportbroaderdevelopmentalobjectives,suchastheenhancedexcisedutypredictabilityandmarketcertaintyofferedbythebenchmark

countriesbypreservingthelevelofrealdutiesinconsiderationofprevailingpricepressures.

BALANCINGTHEBRUNTOFTHEBURDEN

SouthAfrica’sexciseandoveralltaxburdensonbeerhavebeensignificantlyhigherthanthoseofAustralia,Canada,Tanzania,andtheUK.AlthoughMauritiushasahighertax

burdenonbeer,thishasdeclinedfromprevioushighs,whileAustralia,Canada,andthe

UKhavealsomoderatedtheirbeertaxburdensbykeepingincreasesinbeerdutiesatorbelowrealisedinflation.Incontrast,SouthAfrica’sexciseandoveralltaxburdenshaveexpandedmuchfasterthaninallthebenchmarkcountries,mostlydrivenbyabove-

inflationdutyescalations.ThedifferencebetweenSouthAfrica’sexciseandoveralltax

burdenhasalsowidenedaftertheVATratewasraisedby1pptsin2018/19,whilethisgaphasremainedconstantinthebenchmarkcountries.Thissuggeststhatabove-inflation

excisedutyescalationsonbeerinSouthAfricawithoutex-postcorrectionsarenot

onlyhamperingproducersbut,alongwithawideningVATdifferential,isalsoadverselyaffectingbeerconsumers.

Beerconsumptionperpersonhasreducedinallofthebenchmarkcountriesasidefrom

Mauritius,wheretourismplaysarole,whereasthecorrespondingrateofdeclinehasbeen

slowerinSouthAfrica.Particularly,percapitabeerconsumptiondeclinedinthecomparatorstatesevenastheiroveralltaxburdensonbeerhaveeased.Inthisrespect,thebenchmarkcountriesarereducingpercapitaconsumptionlevelsdespitetheirtaxburdensonbeer

beingrelativelylowerandtheirdutiesrisingbylessthanaverageinflationoutcomes,whilegrowingtheirnominalexcisereceiptsfrombeeratthesametime.Itfurtherrevealsthat

SouthAfrica’smountingoveralltaxburdenandabove-inflationexciseleviesonbeermaynotbetheprimarymechanismtoreduceexcessivealcoholuse.

Inlightofthefindingsthroughoutthisstudy,theNationalTreasuryshouldconsideradjustingitsexciseregimeonbeertobettersupporttheexciseprinciplesthatitpurports,the

interactionsthatbeerproducersandconsumershavewiththebroadermacroeconomic

environment,andthelongterm-impactonfiscalreceipts.Thiscanbeachievedbymovingfromaguideline-targetedbeertaxationregimetoastructuredframeworkforgoverningexcisedutyescalationsthatpromotesmorepredictableexcisetaxes,especiallyinperiodsofhighinflation.

Marketcertaintyonthesupplyanddemandsidesoftheeconomycanbeimprovedby

automaticallyindexingexcisedutiesonbeertoinflationoutcomesofthepreviousfiscal

yearasopposedtomanualamendmentsinresponsetoanticipatedretailpricesforbeer

orexpectedCPIinflation.Thisexciseadjustmentframeworkshouldalsoaccommodate

forfluctuationsineconomicgrowth,meaningthatincreasesinexcisedutiesonbeercan

bekeptbelowinflationwhenpricepressuresarehighandberaisedex-posttomaintain

dutyneutrality.Analternative,albeitlessconducive,considerationistoraiseexciseduties

accordingtoprojectedinflation,buttocorrectensuingincreasesindutiesifanticipatedpricepressuresarenotrealisedinpractice.

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THEBURDENOFUNPREDICTABLEEXCISETAXES&HIGHINFLATIONONBEERINSOUTHAFRICA

BEERPRODUCERSFACERISINGCOSTS&TAXBURDENS,

WHILECONSUMERSENDUREHIGHERPRICES&ANEROSION

OFREALINCOMES

Exciseduties

Supply-sideinflation

Risingcosts&expensesforbeerproducers

Reducesconsumeraffordability

Demand-sideinflation

VAT

SouthAfrica’staxburdenonbeerhasincreased&

remainsaboveNationalTreasury’sguidelines,drivenby

Overalltax

burdenonbeer

Exciseduties+VAT

Weightedaverageretailprices

sustainedabove-inflationexcisedutyescalations

%Shareweightedaverageretailprice

Overalltaxburden*

Exciserevenuesburden**

45-

----Guidelinetargettaxburden***

40-

35-

30-

25-

20-

15-

10-

5-

0-

2012/13

2013/14

2014/15

2015/16

2016/17

2017/18

2018/19

2019/20

2020/21

2021/22

2022/23

2023/24

2024/25

Note:*BeerVAT+exciseduties.**Excisedutiesonly.***In2015/16targetedtaxburdenwaschangedfromVAT+excise,toexcisedutiesonlyasa%ofweightedaverageretailsalesprices.

SOUTHAFRICA’STAXBURDENONBEERHASINCREASED&

ISABOVEGOVERNMENT’STHRESHOLDSASPERNATIONAL

TREASURY’SGUIDELINES

Asa%ofweightedaverageretailpricesofbeer:

10%

RetailMargin

20%

ProducerMargin

(Beforeoverheads,

depreciation,

amortizationand

corporatetax)

33%

ProductionCosts

Exciseburdenpersists

aboveNational

Treasury’sguideline

target,whilethe

overalltaxburden

onbeeralsoremains

abovetheprevious

targetforexciseduties

plusVAT.

Thismayaccelerate

diminishingreturnson

beerexcisereceipts

observedmore

recently.

38%

35%

Actualoveralltaxburden

Previousoverall

(excise+VAT)

taxburdentarget

23%

Government

25%

Actualexcisetaxburden

excisetaxburdentarget

Note:SouthAfrica’staxburdensonbeerwere calculatedusingretailpricesforbeersuppliedbySAB,whichalsoprovidedtheremainingcostcompositioninthefinalbeerprice.

COMPAREDTOTHEBENCHMARKCOUNTRIES,SOUTHAFRICA’S

TAXBURDENONBEERISRISINGFASTER,WHILEEXCISE

REVENUESARESLOWING

%Share

(2023/24)Beerexciseshareintotalexciserevenues

35

30

25

20

15

10

5

0

-

-

-

-

-

-

-

-

SouthTanzaniaAustraliaUnitedMauritiusCanada

AfricaKingdom

SouthAfricaissignificantlymorereliantonexcisefrombeercomparedtothebenchmarkcountries.

%p.a.

(2012/13-2023/24)CPIInflationBeerexcisedutygrowth

8

6

4

2

0

-

-

-

-

-

CanadaAustraliaUnitedMauritiusSouthTanzania

KingdomAfrica

TheincreaseinSouthAfrica’sexcisedutiesonbeerhasbeenunpredictable&consistentlyexceededinflation,incontrasttothebenchmarkcountrieswheredutyescalationshave

beenmoremoderate,inlinewithorbelowinflation.

averageretailsales

%shareweighted

Overalltaxburden

Excisetaxburden

-

-

-

-

-

-

-

-

-

-

-

(2023/24)

50

45

40

35

30

25

20

15

10

5

0

MauritiusSouthTanzaniaUnitedAustraliaCanada

AfricaKingdom

SouthAfrica’sexcise&overalltaxburdensonbeercontinuetorise,despitealreadybeinghighcomparedtomostbenchmarkcountries.

Thebenchmarkcountriesareenlargingexciserevenuesfrom

beerevenastheirtaxburdensarediminishing.Conversely,SouthAfrica’sbeerexciserevenuesareprogressively

lessresponsivetothedegreeofdutyincreases.

NationalTreasuryshouldconsideradjustingitsexciseregimeonbeertobettersupporttheexciseprinciplesthatitpurports,theinteractions

THEWAYFORWARDFORTHEEXCISEthatbeerproducersandconsumershavewiththebroadermacroeconomicenvironment,a