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Traders protest against sin tax

Oct. 27, 2020 3 min read

3 min read

SCORES of disgruntled business owners have taken issue with the government on its intention to increase tax on tobacco and alcoholic products.

The government has already drafted the Tobacco and Alcoholic Products Levy Bill, 2020 which was debated at length in Parliament last week.

Stakeholders have been invited to air their opinions on the Bill which flatly received a backlash from the local business community.

This Bill stipulates that the government intends to use this legislation as an instrument to influence acceptable or normal consumption of tobacco and alcoholic products.

Also, it is expected to increase revenue gained in order to provide for developmental programmes.

Once this Bill is passed into Law, alcoholic drinks are expected to increase by per cent while tobacco products will go up by 30 per cent.

The Chairman of the Lesotho Liquor and Restaurants Owners Association (LLROA) Nkeane Motseki said they were not consulted when the Bill was drafted.

He said the Bill has to be withheld to provide room to address some of the issues they are not too comfortable with.

Mr Motseki said the government has warned them that it intends to collect revenue to the tune of M200 million from the sale of alcohol per annual as soon as the Bill passes into Law.

If implemented, he said the Law will have a negative impact on their businesses after they suffered yet another debilitating blow due to the COVID- 19 pandemic.

Entrepreneurs trading in alcoholic drinks have been crying foul over their suffering businesses since the start of the first national lockdown.

Among others, they complain that they were unable to pay rentals and employees’ salaries because there was no business.

Now, the government has given them some relaxation that their customers should only buy their drinks and take them away.

Sitting in the bars and restaurants is prohibited.

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Mr Motseki said they have pleaded with the government to pluck the holes regarding the sale of alcohol before increasing the sin tax.

For him, there is always a problem of alcohol smuggled into Lesotho from South Africa owing to the porous borders between the two countries.

He said about 25 000 people are employed under the LLROA sector, adding those people take care of about 300 000 dependants.

He showed that only 20 per cent of businesses trading in alcohol are licensed and pay tax.

“The rest do not adhere with tax regulations,” he said, adding that the remaining 80 per cent is simply not tax-compliant.

He said: We have since lodged our complaint with Parliament to help protect our businesses against tax evaders.”

He argued that if the Law is implemented, the government will fail to achieve its goal because most businesses will close down.


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