Budget 2023
Share

Sin taxes hit smokers hard

Cape Town - Of all the so-called sin taxes, smokers have been hit hardest. More leniency has however been shown in other areas in Wednesday afternoon’s National Budget.

Smokers will have to pay 82c more for a packet of 20 cigarettes. Last year the increase was 68c per packet. Pipe tobacco will be 26c more for 25g, also a much steeper rise than last year's 9c.

But while drinkers have also been hit with increases, they are generally lower than those of last year. A 340ml can will cost 7c more (9c last year), a bottle of wine (750ml) 19c more (27c last year), spirits R3.77 more (R4.76 last year) and sparkling wine 48c more (62c last year).

Since 2002, tax rates on alcoholic beverages consistently been raised above inflation. This year's amendments continue this trend, with hikes of between 4.8% and 7%.

An additional excise duty category is proposed for grain-based fermented beverages (flavoured alcoholic beverages using 100% unconverted grains). The rate for these beverages will initially be linked to the excise duty for beer.

Other reforms under consideration include providing excise duty relief to wine-based spirits (eg brandy). The rationale is that brandy is at a cost disadvantage compared with other forms of alcoholic spirits, because it takes 4-5 litres of wine to produce a litre of brandy.

Sparkling wine accounts for a small proportion of alcoholic beverage sales and the nature of this market results in large price discrepancies. This may require a review of the way the excise duty on sparkling wine is calculated, according to the Budget Review.

Government proposes a change in the way the targeted tax burden on alcoholic beverages and tobacco products is expressed. VAT will be removed from the calculation and, as a result, the excise tax burden for wine, beer and spirits will henceforth be 11%, 23% and 36%, excluding VAT and rounded to the nearest whole number.

For tobacco products the rate will be 40%.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.94
-0.2%
Rand - Euro
20.46
+0.1%
Rand - Aus dollar
12.35
-0.0%
Rand - Yen
0.13
-0.2%
Platinum
911.00
+1.6%
Palladium
1,008.15
+0.6%
Gold
2,222.33
+1.3%
Silver
24.87
+0.9%
Brent-ruolie
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.9%
Resource 10
57,251
+2.9%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders