Over 50% of the price of your cigarette now goes to tax, according to the National Treasury – and over 20% of alcohol



  • National Treasury officials said more than 50% of tobacco products and 20% of alcohol products are taxed.
  • They said the excise duty, or sin tax, on cigarettes is calculated at 40% of the overall price, and adjusts annually accordingly.
  • Finance Minister Tito Mboweni said the Treasury will soon start taxing e-cigarettes and heated tobacco products.
  • For more stories, visit Business Insider South Africa.

More than 50% of the price of tobacco products and more than 20% of alcoholic products sold in South Africa go to tax, the Treasury said.

This as the state prepares to begin taxing electronic cigarettes.

In his budget speech on Wednesday afternoon, Finance Minister Tito Mboweni said taxes on liquor would increase by 4.4%, on sparkling wines by 6% and on tobacco by 7.5% at the start. April.

This means that South Africans will now pay 4.39 rand per liter of unfortified wine (wine with less than 15% alcohol); R7.34 per liter for fortified wine (wine with more than 15% alcohol), R14.36 per liter for sparkling wine; R 106.56 per liter of ciders and alcoholic fruit drinks; and R213.13 a liter of spirits.

Cigarettes will now be taxed at R 17.40 for 20 cigarettes, R 19.55 for 50 g of cigarette tobacco, R 5.79 for 25 g of pipe tobacco and R 96.45 for 23 g of cigars.

The price of malt beer will drop from R102.07 per liter to R106.56 per liter.

Speaking to Business Insider South Africa on the sidelines of Mboweni’s budget release, Treasury officials said the government’s goal was to maintain the excise duty, or sin tax, on cigarette products. at 40% of the overall cost price.

Officials said the increases are calculated to ensure that 40% of the price of a popular brand of cigarettes is excise duty.

Prior to 2015, the 40% included value added tax on cigarettes, but it has since added to 40%.

More than 50% of the price of tobacco products is therefore returned to the tax.

For alcoholic products, officials said excise duties are calculated at 36% of the average price of spirits, 11% of the average price of wine and 23% of the average price of beer.

Excise duties on alcohol also exclude VAT which is on top of what is already taxed.

Officials said wine is taxed less to support South Africa’s wine regions.

During his budget speech, Mboweni said heated tobacco products containing addictive substances and other chemicals such as hubbly bubbly will soon be subject to excise duty of 75% of excise rates on the cigarettes.

He said electronic cigarettes, or vapes, will be taxed from 2021 in South Africa.

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