Tax hikes for lightbulbs, plastic bags, cigarettes and alcohol in South Africa

 ·21 Feb 2024

Finance Minister Enoch Godongwana has announced that excise duties, A.K.A sin taxes, will be increased in South Africa, along with increases for plastic bags and lightbulbs.

Speaking at the 2024 Budget, Godongwana said that the poor performance of South Africa’s economy has resulted in a sharp decline in tax revenue collection for 2023/24, with R1.73 trillion of tax revenue in 2023/24, R56.1 billion lower than estimated in the 2023 Budget.

This shortfall was largely due to a drop in corporate profits and revenue from taxes on mining.

That said, over the medium term, revenue projections are R45.6 billion higher than the 2023 MTBPS estimates following improved personal income tax and additional medium-term revenue proposals.

The budget contains several measures to raise R15 billion in 2024/25 to alleviate immediate fiscal pressure and support faster debt stabilisation, mainly through not raising the personal income tax brackets, rebates and medical tax credit for inflation.

However, sin taxes were increased by the Treasury.

For alcohol products, there were above-inflation increases of between 6.7% and 7.2% for 2024/25:

  • A can of beer increases by 14 cents;

  • A can of a cider and alcoholic fruit beverage goes up by 14 cents;

  • A bottle of wine will cost an extra 28 cents;

  • A bottle of fortified wine will cost an extra 47 cents;

  • A bottle of sparkling wine will cost an extra 89 cents; and

  • A bottle of spirits, including whisky, gin or vodka, increases by R5.53.

In addition, the tobacco excise duties were increased by 4.7% for cigarettes and cigarette tobacco and by 8.2% for pipe tobacco and cigars, translating to:

  • A R9.51 increase for cigars;

  • A 97 cent increase to a pack of cigarettes; and

  • An extra 57 cents for a pipe of tobacco.

Vapes were also not left unscathed as the excise duty on electronic nicotine and non-nicotine delivery systems, known as vapes, has increased from R2.90/ml to R3.04/ml – a 4.6% increase.

This is a little less than the inflationary increase that PwC previously expected. Inflation jumped from 5.1% in December 2023 to 5.3% in January 2024.

In addition to the sin taxes, Treasury announced additional tax hikes for plastic bags and incandescent lightbulbs.

The government proposes to increase the plastic bag levy from 28c/bag to 32c/bag from 1 April 2024.

To encourage the uptake of more efficient lighting such as light-emitting diode (LED) bulbs and reduce electricity demand, it proposes to raise the incandescent light bulb levy from R15 to R20 per light bulb from 1 April 2024.

“This complements the phase-out of inefficient light bulbs and promotes compliance with the new energy efficiency standards published in May 2023 by the Department of Trade, Industry and Competition,” it said.

Read: Goodbye rooftop solar tax breaks in South Africa

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