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South Sudan wants 100% tax levied on alcohol

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October 19, 2016 (JUBA) – South Sudan will levy a 100 per cent tax on alcoholic products in the proposed 2016/2017 financial budget.

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South Sudan finance minister Stephen Dhieu Dau (Getty)

The new proposal, it finance minister said, will also see higher taxes placed on telecommunications companies and on tobacco sales.

“We will increase excise [duty taxes] on alcohol from 50% to 100% and tobacco from 30% to 50%. This tax on luxury [goods] will improve health,” Stephen Dhieu Dau told Parliament on Tuesday.

South Sudan fiscal year 2015/16 expired three months ago, but government was not able to prepare a new budget for 2016/2017.

However, the country’s lawmakers now need at least one month to study the proposed resource envelope of SSP 22 billion. With inflation at more than 700%, SSP 22 billion is less than half a billion U.S dollars.

According to the finance minister, there will be financial deficit of $225 million, which translates into inability to raise 40% of the proposed budget to fund government for the next 12 months.

Dhieu also warned against borrowing from the country’s Central Bank, which involves printing more cash to meet the financial gaps.

“We need to stop borrowing from the Central Bank of South Sudan in order to bring inflation down and prevent further depreciation of the currency and reduction of households’ incomes,” he said.

The minister admitted that the current inflation in the country was “impossible to overstate the gravity, but called for operating within the limited ability to prevent severe depreciation and further conflict.

“As government we have run down of our foreign reserves and servings and we have limited ability to prevent the severe depreciation we have seen,” Dhieu told lawmakers.

He proposed tougher measures against individuals siphoning taxes, but did not elaborate on how government intends to undertake this.

South Sudan depends on oil revenues for more than 90% of its annual budget.

According to the finance minister, increasing taxes of non-oil revenues such as alcohol, tobacco and reducing government expenditure, will boost the young nation’s economic outlook.

Telecommunication companies in South Sudan will now pay at least 50% of taxes.

Meanwhile, the finance minister has proposed a departure tax of $20 per person on international travels at the airport, emphasising that long term economic stability requires peace in the country.

“Improving security, transparency, and infrastructure will incentivize the development of our mining, forestry and agriculture sectors,” he said.

Dhieu further disclosed that donors were unwilling to support the budget in absence of full implementation of the peace agreement.

“We require external support to help our country (…), however, our international partners have made it clear that external support will not be offered without peace and economic reforms,” he said.

The peace agreement signed in August 2015 hangs in balance after renewed violence in July forced the armed opposition leader, Riek Machar to flee the country. Machar was replaced by former peace negotiator Taban Deng Gai, a move the former said was “illegal”.

(ST)

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  • 20 October 2016 09:19, by Midit Mitot

    Hhahaha Mr Dhuie, will you agree with your Bosses who are very good fund to alcohol in Juba? because Beer will not be bring from Uganda if the tax will be extremely high like that.

    repondre message

    • 20 October 2016 14:14, by Lorolokin

      Even if you raise taxes to 700% your Boss Kiir will buy because his degrees are always by the influence of alcohol.
      Kinkak

      repondre message

  • 20 October 2016 15:13, by Hardlinner

    what did Dhieu meant by increasing alcohol tax to 100%?. is it 100% of their current tax or 100% of current alcohol sell price?. if it is 100% of current alcohol prices, then sellers would likely double the price of alcohol in order to make profit. that simply means alcohol drinkers should brace themselves of price hike.

    repondre message

  • 20 October 2016 15:14, by Hardlinner

    what did Dhieu meant by increasing alcohol tax to 100%?. is it 100% of their current tax or 100% of current alcohol sell price?. if it is 100% of current alcohol prices, then sellers would likely double the price of alcohol in order to make profit. that simply means alcohol drinkers should brace themselves of price hike.

    repondre message

  • 20 October 2016 15:20, by Cobbz

    Good Move Hon Finance Minister. levying 100% taxes on Tobacco, and all alcoholic brands is a good one. But above all Peace is paramount. all the business men have fled the country. their businesses closed and you cant tax empty business premises. Peruse peace (as much as it depends on the gov’t)business will boom and you will be a happy tax collector servant

    repondre message

  • 21 October 2016 09:26, by Dengda

    The Problem of South Sudan is we put wrong people to do right job. Deng Athorbei killed the country severely and was staying for so long by Kiir. Koryom has to go too. We have thousands of people who can prosper this nation, but they are deny a chances. I know Dhieu will not be like by the elites in government mark my word.

    repondre message

    • 21 October 2016 10:47, by Mopedi

      Even if the tax is raised to 1000% it ’ll not work because the drunken master at the end of day to endorse for it to be legal. the bill will lack political will

      repondre message

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