Finance and Development Planning Minister, Retšelisitsoe Matlanyane has accused tobacco and alcohol stakeholders of undermining government’s authority.
She charged saying the request to withdraw the Tobacco and Alcohol Products Levy Act of 2022 was “unreasonable” because intensive stakeholder consultations were held.
Matlanyane was addressing the National Assembly’s Economic and Development Cluster last Thursday following a petition by a coalition of stakeholders including Lesotho Liquor and Restaurant Owners Association (LLROA), Lesotho Chamber of Commerce and Industry (LCCI) and the Southern African Alcohol Policy Alliance (SAAPA) requesting the withdrawal of the Act.
The petition by the coalition states that there were no thorough stakeholder consultations ahead of the ascending the Act.
The petition which was addressed to the National Assembly was referred to the economic and development cluster.
The committee invited the petitioners, the ministry of Finance and the Revenue Services Lesotho (RSL) to the talking table, however, Dr Matlanyane who seemed unimpressed by the stakeholders indicated that, “…in fact intensive stakeholder consultations were conducted prior to enactment of the law.”
The act enforces application of 30 percent levy on tobacco products and 15 percent levy on alcoholic products.
“I regard this act as unacceptable, especially when representatives of the nation through the parliament passes a law, and the same law which received the royal ascent be questioned by a random company from nowhere
“I see this as disrespecting and undermining the authority of the government of Lesotho. The reality is that it is not common to have all laws approved and appreciated by everyone. There are many laws passed which are not approved by many, but they are still in use,” the minister said.
She further insisted that intensive stakeholder consultations were conducted before the Act was approved.
“It is not true that there were no consultations made during the development of the Act.
“Consultations started as early as 2014 and Maluti Mountain Brewery (MMB) has always been part of them, and even during that time, there were unsatisfied stakeholders who delayed the approval progress. The law was supposed to have been implemented in 2015 or 2016,” Dr Matlanyane charged.
Through the Act, the government hopes to use the legislation to influence acceptable or normal consumption of tobacco and alcoholic products, having observed excessive misuse of the two products to the detriment of users.
The act is also expected to increase revenue generation for the government for developmental projects.
The minister said people should look at the bigger picture.
“We are at a crossroads, we need to choose whether we want to be governed by companies who are protecting their personal interests or to look at what is beneficial for the country and Basotho.
When addressing the committee, Dr Matlanyane challenged its members to choose between allowing the benefit of the selected few at the expense of the majority nation.
“It’s up to us to choose whether we want the nation to perish while the selected few benefit. I take this petition and its content as a cohesion to the government to choose to prioritise the interests of a selected few over the nation,” the minister lashed.
The minister pointed out that drug usage which includes both alcohol and tobacco is a national concern and effects are reflected through the ministry of health’s activities as well as government expenditure towards the health ministry which keeps increasing.
“I am talking about road accidents, gender based violence (GBV) and others including admissions of people admitted at hospitals with injuries sustained from fights that broke because drunkenness.”
Dr Matlanyane said despite Lesotho not appearing on international reports on alcohol and drug abuse, there is a noticeable growing challenge of drug abuse especially amongst the youth.
She said the two levies are not influenced by the government’s need to generate income.
She also rebuffed the petitioners claim that RSL was not adequately prepared for implementation of the law.
“We have evidence in a form of documents where communication was made to all stakeholders regarding the law.”
Mdu Lokotfwako, MMB Managing Director pleaded with the committee to suspend the usage of the Act until the taxman has made necessary amendments which will allow smooth implementation by all tax-payers.
“We plead with the committee to encourage government to partner with the industry to address issues of harmful impacts owing to consumption of alcohol through awareness campaigns, and not enforcing this law.
Lokotfwako said among repercussions of implementing the Act is the eminent job loss threat at MMB.
“We are one of the major contributors towards the country’s Gross Domestic Product (GDP) and the only local producer of alcohol products in the country, thus consideration should be made to protect employment,” the MD said.
Mphonyane Mofokeng, the founder of the Anti-Drug Abuse Association of Lesotho (ADAAL) who was in attendance on the hand hailed the government’s move to pass and implement the sin tax law.
She said abuse of alcohol and tobacco is among factors which negatively impact the country’s economic development.
“Alcohol is a massive obstacle to the sustainable development goals for individuals, communities and entire society. Because of alcohol Lesotho fails to report on SDGS because alcohol affects 14 of the 17 SDGS,” she said.