New taxes for vaping, cigarettes, and alcohol
Finance minister Enoch Godongwana has announced increases in excise duties for alcohol and tobacco products, as well as a hefty new tax for vaping liquids.
The minister delivered his 2022 budget speech on Wednesday, revealing that the so-called “sin tax” category was again a prime target as a source of additional funding for the National Treasury.
Godongwana announced increases of between 4.5-6% for various alcohol beverages and smoking products, including:
- 340ml can of beer or cider — 11 cents increase
- 750ml bottle of wine — 17 cents increase
- Bottle of sparkling wine will cost an additional — 76 cents increase
- Bottle of spirits — R4.83 increase
- Packet of cigarettes — R1.03 increase
- 25gr piped tobacco — 37 cents increase
- 23gr cigar will — R6.77 increase
The new taxes on these products will apply with immediate effect.
In addition, the government has proposed a new tax on vaping liquid (or “juice”) of at least R2.90 per millilitre from 1 January 2023.
Godongwana said the tax would first have to be subjected to a public consultation process, although he wished he could also immediately implement it.
A typical bottle of vaping liquid on the South African market contains either 100ml or 120ml, which means an additional R290 to R348 in taxes must be added to the price.
Online stores like vapeking.co.za sell these for between R200 and R300, meaning many of the products will become twice as expensive based on the planned tax unless manufacturers are willing to cut down on their margins.
Bottles of vaping liquid. Credit: Krysja / Shutterstock.com
In addition to the vaping liquid tax, the government plans to introduce a tax on beer powders.
However, it did not reveal how much this would be nor when it would come into effect.
Consumers can also expect an increase in prices on products containing lots of sugar, with a hike of 2.31 cents per gram as part of the health promotion levy.
This tax has remained unchanged since its introduction three years ago.
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