Bad news for beer and spirit drinkers
Bad news for drinkers, especially beer and spirit lovers! So-called "sin taxes" on alcohol are going up by between 6% and 20%, almost enough to drive one to teetotalism.
But this should not really come as a shock to tipplers as Finance Minister Pravin Gordhan has previously warned that tax formulas were under review to bring South Africa more into line with other countries and to assist in the fight against alcohol abuse.
However, Gordhan may have also been taking the advice of Dhiveshan Naicker who offered him the following tip: "Raise the tax on alcohol and cigarettes so that people will stop drinking and smoking too much." Gordhan said this was good advice.
The current targeted total tax burdens (excise duties plus VAT) on alcoholic beverages are 23%, 33% and 43% of the weighted selling price of wine, beer, and spirits respectively. These benchmarks have now been reviewed.
"It is now proposed to retain the current benchmark for wine, but to increase the targeted benchmark tax burdens for beer and spirits to 35% and 48% respectively," the Budget Review document said.
"These increases will be phased in over two years."
This year sees excise duties on sparkling wine rise by 8% to 7.53 rand/litre, unfortified wine by 7.7% to 2.50 rand/litre and fortified wine by 6% to 4.59 rand/litre.
The big rises are malt beer, up by 10% to 59.4 rand per litre of absolute alcohol (not per litre of beer), alcoholic fruit beverages, up by 9.6% to 2.97 rand/litre and spirits, up by a whopping 20% to 111.64 rand per litre of absolute alcohol.
Excise on cigarettes rises 6% to 10.32 rand per packet of 20, cigarette tobacco by 4.9% to 11.05 rand/50grams, pipe tobacco by 8.1% to 3.22 rand/25 grams, and cigars by 5% to 53.05 rand/23 grams.
As was the case last year - and in previous years - traditional beer managed to again escape the excise tax net, maybe a good enough reason to try it out.
The bottom line for drinkers and smokers is this: a packet of 20 cigarettes will cost 58 cents more; a litre of wine will cost 18 cents more; a 340ml can of beer will cost nine cents more; and a 750ml bottle of spirits will cost six rand more.
Source: I-Net Bridge
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