The Minister of Finance, Mr Enoch Godongwana, has invited South Africans to share suggestions on the National Budget. The South African Liquor Brand Owners Association (SALBA) proposes an immediate freeze on spirits excise increases. This measure would enable legitimate businesses in the spirits sector to reclaim market share being lost to illicit traders, which robs the fiscus of billions in revenue.

SALBA welcomes the additional R7.5 billion allocated to SARS over the medium term to combat illicit trade, particularly in the alcohol industry. This funding forms part of the government’s broader strategy to boost revenue collection and strengthen enforcement against tax evasion.

A study commissioned by the local alcohol industry and conducted by Euromonitor estimates that the illicit alcohol trade resulted in a R16.5 billion loss to the fiscus in 2024. Spirits account for R10.5 billion (66%) of this shortfall, with illicit spirits comprising over half (53%) of all illicit alcohol sold in South Africa.

SALBA’s proposed excise freeze addresses the excessively high tax incidence rate for spirits—currently exceeding the National Treasury’s 36% target, which Treasury itself has acknowledged. This high burden fuels illicit trade.SALBA also welcomes the Minister’s statement that “the growing markets for illicit cigarettes and alcohol pose serious risks to public health and undermine legitimate businesses. Each year, billions of rands in taxes go uncollected — funds that could close our revenue gap and avoid tax increases entirely” (Medium Term Budget Policy Statement, 12 November 2025).

In his State of the Nation Address, President Ramaphosa confirmed the national government’s intent to tackle the illicit trade in alcohol. However, excessive excise hikes on spirits alluded to by the President will only empower illicit traders. While the government’s anti-illicit trade measures are vital, they will not yield immediate results.

A spirit’s excise freeze would allow legitimate businesses to regain market share, curb illicit growth, support jobs and boost excise revenue.SALBA commits to ongoing collaboration and consultation with government and law enforcement.