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The government will increase the excise duties on alcohol and tobacco products by 8%, the National Treasury said on Wednesday.
This comes as the National Treasury took a decision to reverse its earlier announcement of additional tax measures that would have raised R40 billion amid a revenue shortfall.
“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.”
This means that a bottle of fortified wine will go up by a rate of 58 cents, while sparkling wine will go up by a rate of R1.15 cents.
Whiskey, gin, rum, brandy and vodka drinkers will feel the pinch as an 8% hike means the excise on spirits goes up by a rate of R5.5 cents.
Treasury said tobacco product excise duties will also increase by 8% in 2021/22. The policy framework for both alcohol and tobacco will be reviewed during 2021/22.
While a box of 20 cigarettes will go up by R1. 39 cents, cigar smokers will find themselves in a bigger puff of smoke as their Cubans will go up by R7. 71 cents.
The National Treasury will soon publish a discussion paper on proposals to tax electronic nicotine and non-nicotine delivery systems.
An excise duty will be introduced later this year, following public consultations.
– SAnews.gov.za
