In brief

The National Treasury in South Africa has implemented a deferment of excise duties in respect of payments, for excise compliant businesses in the tobacco and alcohol industries. This is due to the detrimental effect of lockdown restrictions on the sale of alcoholic beverages and tobacco products. Virusha Subban, Partner and Head of Tax, and Prenisha Govender, Associate in the Tax Practice at Baker McKenzie in Johannesburg, outline the key details of these deferrals.


Contents

Key takeaways

  • Due to the lockdown restrictions on the sale of alcoholic beverages and tobacco products in South Africa, National Treasury implemented a deferment of excise duties for excise compliant businesses in respect of payments due in May and June 2020. The deferment facility allows taxpayers to defer tax payments without interest or penalties levied.
  • Upon request from the alcohol industry, on 11 August 2020 National Treasury implemented a further 90-day deferral on excise taxes due in August and September 2020 for selected alcoholic beverages.
  • In addition, special relief is afforded tobacco licensees of excise manufacturing warehouses. Tobacco licensees may qualify for a 150-day deferment of excise duty payments, on condition that their excise accounts are submitted to the Commissioner.
  • Companies and traders with payments due in terms of the Customs and Excise Act, 1964, may also apply to the South African Revenue Service (SARS) to make payment instalments.

Please feel free to contact us for further guidance on applications for the deferment facility and instalment payment arrangements.