The bad news for smokers in this year’s Budget is that the National Treasury has set its sights firmly on those smoking cigars in its mission to generate much-needed revenue through taxes in April.
“The consumption of cigars has moved towards more expensive brands, requiring a higher-than-inflationary increase to maintain the targeted tax burden.
“Government proposes to increase the excise duty between 8% and 9.5%,” the Budget Review said.
It also said the targeted excise burden as a percentage of the retail selling price of the most popular brand within each tobacco product category was 40%.
Alcoholic beverages have not been spared either.
The increase for wine, beer and spirits are 11%, 23% and 36%, respectively.
“Since the implementation of the current excise regime in 2002, tax rates on most alcoholic beverages have consistently increased above inflation annually.
“The 2017 Budget continues this trend with proposed excise tax burdens of between 6.1% and 9%.”
Speaking to journalists before tabling his Budget speech in Parliament yesterday, Finance Minister Pravin Gordhan said the increases in “sin tax” were one way of taking care of the lungs and livers of smokers and drinkers.
“We have taken care of your stuff,” he said.
The good news for the roughly 17 million social grant beneficiaries in South Africa is that they will receive increases in April despite the uncertainty surrounding who will be making their payments it was all good news to the social welfare grant beneficiaries.
This as the about 17 million social grant beneficiaries remain in the dark as to who will be paying out the grants on April 1.
Old age grants would increase by R90 to R1 600 for pensioners over the age of 60 and R1 620 for those over 75.
Disability and care dependency grants were also to increase by R90 to R1 600.
Foster care grants will increase by R30 to R920 while the child support grant will increases R20 to R380.