In February, South Africa Wine launched a vital excise tax campaign to address the proposed tax hikes that threatened the sustainability of the industry. The National Treasury’s proposed shift to alcohol-content-based taxation would have led to an unsustainable 72% weighted average increase in excise rates, placing undue pressure on producers, job security, and the broader economy.
The industry contributes R56 billion to the country’s GDP, supports 270,364 jobs, and plays a vital role in tourism and rural development. The proposed excise tax changes would have had severe consequences: increased costs for wine producers, making it harder to compete globally, disproportionate tax burdens on South African wines, threats to business sustainability, and negative economic ripple effects, particularly for small-scale farmers, cellars, and rural communities.
Industry Response and Next Steps
South Africa Wine submitted a comprehensive response to the National Treasury, outlining the severe repercussions of these tax proposals.
However, the organization recognized that industry-wide participation would strengthen its case. Members were called upon to submit responses before the 14 February 2025 deadline, urging them to highlight the impact of these changes on their businesses, employees, and communities. Many took action, ensuring that government officials heard firsthand the challenges these policies would create.
South Africa Wine stated, “We sincerely thank every member who submitted their concerns to the National Treasury.” The organization emphasized that these voices played a crucial role in amplifying the message that excessive tax increases are unsustainable and unfairly disadvantage the industry.
There was disappointment that the Budget Speech, originally scheduled for 19 February, did not take place, as the country urgently needs policy certainty to attract investors. With the budget announcement now rescheduled for 12 March, there is hope that sustainable solutions will be discussed within the Government of National Unity (GNU).
This campaign, however, is just the beginning. In the coming months, South Africa Wine will continue engaging with relevant government structures, ensuring that the wine industry’s voice is heard. The organization remains committed to advocating for a fair and balanced excise policy that supports industry growth while allowing the government to meet its revenue objectives.
South Africa Wine will provide updates on ongoing discussions, future engagements, and further steps needed to protect the industry’s future. Continued support and collective action remain vital in securing a sustainable and competitive environment for South African wine.