South Africans who drink and smoke will now have to reach deeper into their pockets to purchase products after the government increased the excise duties on alcohol and tobacco products by between 4.5% and 6.5%.
In his 2022 Budget Speech, finance minister Enoch Godongwana said the increase will take effect immediately, and was outlined as follows:
- A 340ml can of beer or cider will cost 11c more;
- A 750ml bottle of wine will be 17c more expensive;
- A bottle of sparkling wine will cost an additional 76c;
- And a bottle of spirits will be R4.83 more expensive;
- A packet of cigarettes will cost an additional R1.03;
- 25 grams of piped tobacco will cost an extra 37c; and
- A 23 gram cigar will be R6.77 more expensive.
But that’s not all. The government is also proposing to introduce a new tax on vaping products of at least R2.90 per millilitre from 1 January 2023.
Calls for the government to reduce the excise tax rate were heard prior to this announcement, as South African Breweries highlighted how smaller businesses will benefit from this move, especially considering the closure of more than 30% of local craft breweries, and around 150 000 jobs lost, BusinessTech reports.
National Liquor Traders were disappointed with the increases in alcohol and tobacco products, with convener Lucky Ntimane expressing that people should stop using the word ‘sin tax’, as the term was “unconstitutional,” EWN adds.
There is, however, no income tax increases, and for the first time since 1990, the fuel levy and Road Accident Fund levy have not increased.
There will be an inflation adjustment to the personal income tax brackets and rebates of 4.5% which means anyone receiving a salary increase of 4.5% would not pay more tax, and people under the age of 64 can earn R91 250 a year before paying tax.
Those who receive social grants can also expect an increase on the monthly relief payments as the old age, war veterans, disability and care dependency grants are set to increase by R90 in April and R10 in October. The foster care and child support grants will increase by a once-off R20 in April.