The government has proposed an increase of 4.5% in line with inflation for excise duties on alcoholic beverages and tobacco.
Loosely translated, this means that consumers of alcohol and smokers will now have to fork out more to indulge in their favourite products.
- 340ml can of beer increases by 10c
- 750ml bottle of wine goes up by 18c
- 750ml bottle of spirits rises by R3.90
- 23g cigar shoots up by R5.47
- An excise duty on a pack of 20 cigarettes rises by 98c
“On illicit trade, over the past three years, SARS [SA Revenue Service] has taken several steps to enhance its effectiveness in combating illicit trade, particularly on tobacco,” said the minister.
“To this end, SARS has completed 2 316 seizures of cigarettes and tobacco products to the value of R598.8-million. An additional R18-billion worth of schedules and assessments have been raised, targeting syndicated tobacco-related crimes.
“Furthermore, SARS has collected more than R1.2-billion in revenue and handed over 92 cases for criminal proceedings with the NPA [National Prosecuting Authority], of which two resulted in successful convictions relating to tobacco-smuggling syndicates.”
Meanwhile, the agricultural sector’s hopes and dreams of getting a decrease or a total scrapping off of the sugar tax, formerly referred to as the health promotion levy (HPL), have been dashed.
In 2022, Godongwana announced an increase in tax, which stipulated that the levy for beverages with more than 4g of sugar content per 100ml will increase from 2.21c/g to 2.3c/g.
There was also a possibility that the health promotion levy will be extended to fruit juices, but the changes are not yet in effect, as the minister has proposed to revisit the matter in April, to allow for further consultation.
Nonetheless, the wait is becoming unbearable for the ailing sector.
With sugar-producing giant Tongaat Hulett facing a financial crisis and currently undergoing business rescue, the industry is faced with difficulties more than ever, and an increase in the sugar tax will most likely cripple the sector further.
Godongwana was the bearer of bad news when he announced that the levy will not be scrapped, but will remain the same instead.
“Due to a difficult operating environment for the sugar industry from the impact of flooding and social unrest, the [HPL] will remain unchanged for the following two fiscal years, to enable the industry to diversify or restructure,” he said.
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