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#BudgetSpeech2019: Smokers, drinkers to feel the pinch following sin tax hikes

In Finance Minister Tito Mboweni's first Budget Speech since his appointment, he announced that sin taxes on alcohol and tobacco will rise by the above-inflation rate of between 7.4% and 9%. The hike is expected to bring in an additional R1bn in revenue.

©foodandmore via 123RF
The excise duties on alcohol and tobacco will be increased as follows:

• The excise duty on a can of beer goes up by 12 cents to R1.74
• A 750ml bottle of wine will have an excise duty of R3.15, which is 22 cents more
• The duty on a 750ml bottle of sparkling wine goes up by 84 cents to R10.16
• The duty on a bottle of whiskey will go up by R4.54 to R65.84
• A pack of 20 cigarettes goes up by R1.14 cents to R16.66
• The excise duty on a typical cigar will go up by about 64 cents to R7.80
• The excise duty on sorghum beer will not be affected

While IOL says that Mboweni turned a deaf ear to the tobacco industry’s desperate calls to not increase the interest on tobacco from their current level, the minister did reveal that a new Illicit Economy Unit will be launched in August 2018 to fight the trade in illicit cigarettes and tobacco.



“Cigarette makers appear to have absorbed most of the increases last year rather than increasing prices. As a result, the excise burden for cigarettes is likely to remain slightly above the target level," the Treasury said.

Government also intends to start taxing e-cigarettes and ‘tobacco heating products’ at some point.

In other tax changes, the sugar tax (under the promotion of health levy) will increase to account for inflation, moving from 2.1 cents per gram in excess of 4 grams of sugar per 100ml, to 2.21 cents from 1 April 2019.
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