Storm over alcohol, tobacco levy

MASERU – THE government has lost a staggering M500 million after it failed to pass the Alcohol and Tobacco Levy Bill, parliament heard this week.

The parliamentary Economic Cluster chairman, Sello Hakane, told the House on Monday that the government could have collected this money had it passed the new law last year.

Hakane was addressing parliament during the discussion of the budget.

“The government could have collected that much if the previous government had passed the law,” Hakane said.

“Now the country is reeling from the shock of the massive loss in revenue collection,” he said.

“The failure of the previous regime to pass the law has had a devastating impact on the already feeble economy.”

Hakane, the Qeme MP under the Revolution for Prosperity (RFP), said they could not ask the people to pay the tax unlawfully hence the requirement to first pass the law.

The Alcohol and Tobacco Levy provides a 30 per cent levy on tobacco products and a 15 percent levy for alcohol.

The provision came into force on March 1.

It has however triggered a sharp increase in the price of tobacco and alcohol sparking a furore among alcohol and tobacco dealers in Lesotho.

Hakane said for the government to work efficiently it must be able to collect tax.

His statement however infuriated the leader of opposition, Mathibeli Mokhothu, who argued that the law had been passed but was blocked by the courts.

The Bill was part of many that a local journalist, Kananelo Boloetse, and a lawyer Advocate Lintle Tuke, asked the High Court to stop because they were being passed after the King had dissolved parliament.

The High Court ruled that parliament had passed the laws outside the provisions of the constitution.

Mokhothu said the previous government did its best to pass the law but was thwarted by the courts.

He said Hakane’s insinuation that the former government had failed to pass the law was incorrect.

Hakane said the government wants people to minimally use both tobacco and alcohol because they have a devastating impact on the bodies of their users.

He said some countries such as Botswana have since implemented the Alcohol and Tobacco Levy.

“These people become sick after smoking and it is the responsibility of the country to protect them,” Hakane said.

The president of the Lesotho Liquor and Restaurant Owners Association (LLROA), Nkeane Motseki, said they are not happy with the new law at all.

He said there was no consultation so that they could be prepared for the new law.

Motseki said they have asked the Senate to find out if the Bill was procedurally turned into law.

“We are going to meet the Minister of Finance this week over this law,” Motseki said.

He said their businesses suffered under the Covid-19 pandemic and now they are grappling with high taxes.

He said people are already smuggling tobacco from South Africa, which leads to a lot of it not being taxed, much to the prejudice of tax-paying businesses.

He said their businesses are going to suffer under the new law.

Majara Molupe