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Alcohol & Tobacco Tax Increase

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alcohol & cigarettes

You can expect to pay more for alcohol and tobacco, as government has decided to increase the excise duties on these products.

On Wednesday, Finance Minister Tito Mboweni announced that the excise duties on these products will increase by 8%.

“Taxes on alcohol and tobacco are guided by a policy framework that targets the excise duty burden. The current targeted excise duties for wine, beer and spirits are set at 11%, 23% and 36% respectively.

“Excise duties have been increasing above inflation in most recent years, resulting in a higher tax incidence. Government will increase excise duties on alcohol by 8% for 2021/22.”

The price of a bottle of fortified wine will go up by 58 cents, while sparkling wine will go up by R1.15 cents. 

Whiskey, gin, rum, brandy and vodka will also go up, as the 8% increase means these products will cost an extra R5.5 cents.

Smokers can expect to pay R1.39 cents for a box of 20 cigarettes, while cigar smokers will pay R7.71 cents more for cigars. 

The National Treasury is expected to soon publish a discussion paper about proposals to tax the delivery systems of electronic nicotine and non-nicotine.

An excise duty will then be introduced later this year, once members of the public have been consulted.

“In the 2020 Budget, an excise duty was introduced for heated tobacco products. To more appropriately tax these products, excise duties will be differentiated by product type. Products comparable to cigarettes that are normally sold in packs of 10 or 20 sticks will be taxed accordingly, while other products will be taxed by weight.”  said Mboweni. 

Those affected can expect the policy framework for alcohol and tobacco will be reviewed during 2021/2022. 

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