The government through the Ministry of Finance and the Lesotho Revenue Authority (LRA) has however, proposed the introduction of a 30 percent levy on tobacco products and a 15 percent tax on alcoholic drinks.
Discussions around implementation of the bill are currently ongoing.
In its new revenue and collection efficiency measures, the government reiterated during the budget speech presentation for the fiscal year 2021/22 that it intends to introduce policy measures and legislation that would make the budget estimates a reality.
Among these policy measures, the Minister of Finance, Thabo Sophonea, just like his predecessor and current Prime Minister Dr Moeketsi Majoro promised that the government would introduce the said sin tax.
Projected collections amount to M286.6 million.
Since the proposition of the idea, the MMB has been resolute that the proposed levy would only be detrimental to the industry.
The company said in the past that the levy on alcohol specifically, applies in addition to the excise increase of 7.4 percent as announced in South Africa in 2019 which is also applicable to all members of the Southern African Customs Union (SACU), including Lesotho.
In effect, MMB had warned that consumers will face an increase in prices of up to 22.4 percent, excluding necessary inflationary cost increases.
If the government finally implements these ideas, MMB is deeply concerned about an increase in smuggling, some possible job losses on its part as well as consumers switching to informal alcohol, thus negatively affecting the entire liquor industry in Lesotho.
This week again the company, along with industry partners including the Lesotho Liquor and Restaurant Association (LLROA), has come out with guns blazing, opposing the implementation of the alcohol levy. “The MMB along with industry partners like the Lesotho Liquor and Restaurant Association is calling for no alcohol levy implementation, to save businesses and jobs, to limit smuggling, which cuts profits, to guard against un-registered traders, who don’t contribute to government revenue,” MMB said in a statement.
On Wednesday, President of the Lesotho Liquor and Restaurant Association (LLROA) Motseki Nkeeane told Metro in an interview that they have been engaging in a number of consultations with the government through the Ministry of Finance and the LRA over the matter, however, the parties remain at loggerheads to date.