Smokers and drinkers will from Wednesday have to dig deeper into their pockets for cigarettes and alcohol.<\/p>\n
This comes after Finance Minister Tito Mboweni in the 2020 Budget Speech announced increases of between 4.4% and 7.5% in excise duties on alcohol and tobacco.<\/p>\n
From Wednesday, a 340ml can of beer or cider will cost an extra 8 cents while a 750ml bottle of wine will cost an extra 14 cents.<\/p>\n
Other increases will see a 750ml bottle of sparkling wine cost an extra 61 cents, while a bottle of 750ml spirits, including whisky, gin or vodka, will rise by R2.89.<\/p>\n
A packet of 20 cigarettes will be an extra 74 cents, while a 25 gram of piped tobacco and a 23 gram cigar will cost an extra 40cents and R6.73, respectively.<\/p>\n
In its Budget Review report, the National Treasury said Government will introduce a new category or tariff sub-heading for heated tobacco products in the schedule of excise duties. These products are not currently subject to excise duty.<\/p>\n
\u201c[These are] to be taxed at a rate of 75% of the cigarette excise rate with immediate effect,\u201d reads the report.<\/p>\n
Electronic cigarettes are different to heated tobacco products: they do not contain tobacco, but they do contain nicotine or other chemicals.<\/p>\n
\u201cCurrently, electronic cigarettes are not taxed,\u201d said National Treasury.<\/p>\n
The report notes that, globally, policymakers are looking at regulating and taxing these products due to concerns about their health effects.<\/p>\n
Government intends to tax electronic cigarettes in 2021.<\/p>\n
The 2020 Budget has again not spared smokers and alcohol drinkers.<\/p>\n
Taxes on alcohol and tobacco, reads the report, are determined within a policy framework that targets the excise duty burden.<\/p>\n
\u201cThe excise burdens for most types of alcoholic beverages and tobacco products currently exceed the targeted level as a result of above-inflation increases and price fluctuations,\u201d reads the Budget Review.<\/p>\n
Government will increase most excise duties by an amount that matches expected inflation of 4.4% for 2020\/21, and by 6% in the case of sparkling wine and 7.5% for pipe tobacco and cigars.<\/p>\n