By Seleoe Nonyane
Maluti Mountain Brewery (MMB) has called for the Tobacco and Alcohol Levy Act to be held in abeyance until the Revenue Service Lesotho has made the necessary amendments to the law, that will make it Transparent and implementable by all tax-payers.
MMB’s director of government affairs and stakeholder relations Mdu Lokotfwako further asked parliament’s economic cluster committee to partner with the industry to address issues of harm reduction through awareness raising and better enforcement of existing laws.
Lototfwako indicated that MMB is a major contributor to GDP, and the only local producer of alcohol products in the country, thus the consideration be made towards protecting employment.
He said, to the industry, the levy means that local prices of alcohol have increase, and the risk of smuggling could affect local business growth potential.
“Local manufacturing is at risk due to a decrease in demand driven by price elasticity and illicit trading. The local liquor industry and small micro-medium enterprises (SMME) are under pressure from illicit imports and unlicensed home brewers, risking 25 000 jobs.”
He mentioned that the levy goes against the Southern African Customs Union (SACU) Revenue Sharing agreement which states that customs and exercise duties which include any additional charges on alcohol fall under the agreement.
“Articles 20 to 23 of the SACU agreement indicate that the essential requirement is that member states must agree on SACU revenue sources. So, unilateral levies are in clear conflict with the SACU formula.
“The articles also imply that levies are paid into the national fiscus of a member state; this gives the impression that they are designed to avoid the operation of the SACU Revenue Pool.
“The agreement adds that any discriminatory treatment that would modify the conditions of competition in favour of the domestic industry would fall foul to World Trade Organization (WTO), Southern African Development Community (SADC) and SACU rules.”
Lototfwako said made these remarks when MMB hosted the Economic Cluster Committee of the National Assembly this week to showcase the brewery’s economic contributions and its ongoing value to the economy of Lesotho.
He went on to indicate that the global beer sector contributes to Lesotho’s economy through its domestic and international operations, and its worldwide supply chain.
Lokotfwako said the global beer sector supported a $67 million Gross Value Added (GVA) contribution to Lesotho’s GDP in 2019, which was equivalent to 2.8 percent of national Gross Domestic Product (GDP), or 10 percent of Maseru’s economy.
“MMB operational footprint includes one large brewery, four depots and seven appointed distributers across the country.
“MMB is home to over 264 employees and, for us, building an empowered nation means working with people who call Lesotho home.
“There are seven contractors on site, including water treatment, canteen services, waste management, cleaning and maintenance, security and third party transporters,” he said.
He added that the contractors’ combined employment numbers over 100.
Lototfwako revealed that between 2016 and 2022 MMB has contributed over M2.5 billion in taxes, adding that the company’s dream is to build the most aspirational company in Lesotho, that supports its people, creates jobs and empowers communities.
He said MMB’s key business priority is to digitize and monetize the ecosystem, emphasising that with more access to innovative applications, MMB is creating streamlined ways of working for their retailers, which in turn revolutionizes the way thy run their business.
He said another MMB key business priority is to optimize their business, meaning their efforts will be aimed at optimizing resource allocation, taking robust risk management approaches and developing an efficient capital structure.
Lastly, he said MMB continues to advance their commitment to responsible consumption through their responsible consumption platform and advance their Environmental Social Governance (ESG) agenda through driving sustainable innovation.
