Sin Tax: Vaping, smoking and drinking will cost Mzansi much more - Budget 2024

Government said that it has proposed an increase on excise duties on alcoholic beverages by between 6.7 and 7.2% for 2024/25. Photographer Ayanda Ndamane African News Agency (ANA)

Government said that it has proposed an increase on excise duties on alcoholic beverages by between 6.7 and 7.2% for 2024/25. Photographer Ayanda Ndamane African News Agency (ANA)

Published Feb 21, 2024

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Finance Minister Enoch Godongwana has proposed an increase on excise duties on alcoholic beverages by between 6.7 and 7.2% for 2024/25.

Treasury stated in its 2024 Budget Review that the guideline excise tax burdens for wine, beer and spirits are 11%, 23% and 36% respectively of the weighted average retail price.

So what does this mean?

– A can of beer will increase by 14 cents

– A can of cider and alcoholic fruit beverages will go up by 14 cents

– A bottle of wine will go up by 28 cents

– A bottle of fortified wine will go up by 47 cents

– A bottle of sparkling wine will cost an extra 89 cents and lastly

– A bottle of spirits, including whiskey, gin or vodka will increase by R5.53

Godongwana has noted that excise duties have increased more than inflation in the last few years and this has resulted in a higher tax incidence.

“The guideline excise tax burden as a percentage of the retail selling price of the most popular brand within each tobacco product category is currently 40%. Government proposes to increase tobacco excise duties by 4.7% for cigarettes and cigarette tobacco and by 8.2% for pipe tobacco and cigars for 2024/25,” according to the Budget Review.

There will be a R9.51 cents increase for cigars; a 97 cents increase to a pack of cigarettes; and a 57 cents increase for a pipe of tobacco.

Vaping

Government said that it has implemented an excise duty on electronic nicotine and non-nicotine delivery systems, known as vaping, with effect from 1 June 2023 at a flat excise duty rate of R2.90 per millilitre on both nicotine and non-nicotine solutions.

Treasury said that it proposed to increase these excise duties in line with expected inflation to R3.04 per millilitre for 2024/25.

Godongwana, in his 2024 Budget Speech said that Kamogelo Mogane, a Soweto resident who gave his tips to the minister, had a pertinent suggestion.

Mogane called for an introduction of a tax payment for hubbly bubbly, e-cigarettes and other alternatives.

“The country has seen an increase in the number of youth smoking these products and parents are not pleased with this at all,” Mogane noted.

“You will be happy to hear then, that we are tabling an increase of the excise duty on electronic nicotine and non-nicotine delivery systems, known as vapes, to R3.04 per millilitre,” the minister noted.

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