Sin taxes up, new measures eyed for alcohol

Finance Minister Pravin Gordhan announced the usual range of excise duty increases on alcohol and tobacco products as part of the Treasury's 2010 Budget proposals.

This year's increases, which are lower than last year's, are in line with the government's ongoing policy of maintaining a fixed level of tax incidence on these products 23% on wine, 33% on malt beer, 43% on spirits and 52% on tobacco products.

However, there could be worse news on the horizon for drinkers, particularly.

"Given that the tax burden benchmarks for the various alcoholic beverages were set as far back as 2002, and considering the social need to curb alcohol abuse, a consultation process to increase these benchmarks will be initiated during 2010," the budget review document said.

For the next tax year, excise duties on sparkling wine rise by 8.3%, unfortified wine by 8.1%, fortified wine by 8.3%, malt beer by 8.2%, alcoholic fruit beverages by 8.2% and spirits by 8.9%.

Excise on cigarettes rises 16.1%, cigarette tobacco by 6.3%, pipe tobacco by 8.0% and cigars by 6.2%. These increases are higher than last year.

As was the case last year and in previous years - traditional beer managed to again escape the excise tax net.

The bottom line for drinkers and smokers is this: a packet of 20 cigarettes will cost R1.24 more; a 750ml bottle of wine will rise by R2.14 to R4.03 (fortified and unfortified); a 340ml can/bottle of beer will cost 6c more; and the tax on a 750ml bottle of spirits will rise to R27.27.