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.
Presenting his 2021 Budget Speech on Wednesday (24 February), finance minister Tito Mboweni said that the following increase will take effect immediately:
- A 340ml can of beer or cider will cost an extra 14 cents;
- A 750ml bottle of wine will cost an extra 26 cents;
- A 750ml bottle of sparkling wine an extra R1.15 cents;
- A bottle of 750 ml spirits, including whisky, gin or vodka, will increase by R5.50;
- A packet of 20 cigarettes will be an extra R1.39;
- 25 grams of piped tobacco will cost an extra 47 cents;
- And a 23 gram cigar will be R7.71 more expensive.
“It is clear that excessive alcohol consumption can lead to negative social and health outcomes,” Mboweni said.
“Consumers do react to price increases, and higher prices should lead to lower consumption of alcohol products with positive spinoffs.”
Provincial governments have also expressed an interest in increasing the price of alcohol as a means of curbing alcohol abuse.
Speaking in his state of the province address on Wednesday (17 February), Western Cape premier Alan Winde said that the economic damage caused by the national ban on alcohol sales during the Covid-19 lockdown was unsustainable.
However, he said that the provincial data showed that there are clear problems with alcohol abuse in the country.
“That is why we are instead pursuing more targeted interventions by amending the Western Cape Liquor Act. These amendments will directly and indirectly reduce alcohol harms, as well improve the efficiency of the Western Cape Liquor Authority,” he said.
Winde said that a series of these first amendments will be presented to a Regulatory Impact Assessment committee next week, and a formal submission to cabinet will happen by the end of next month.
“Our intention remains to have this amendment bill published for public comment in the next few months.
“In addressing this major problem in our communities, I am also committed to working with the industry and consumers to find new and innovative solutions to reduce alcohol-related harms in the Western Cape,” he said.
Western Cape premier Alan Winde says that the province plans to introduce further regulations around the sale of alcohol in an effort to curb abuse.