From 1 June 2023, nicotine-substitute solutions, including vaping products, will be included in the tax net with a flat excise duty rate of R2.90\/ml.<\/p>\n
Excise duty on vaping tobacco products has been in the pipeline for a while – the tax was first announced in finance minister Enoch Godongwana’s 2022 budget speech.<\/p>\n
The South African Revenue Service (SARS) said that the forms which govern Tobacco Product Excise had been amended to account for vaping products.<\/p>\n
“Manufacturers of these products are therefore required to apply for and obtain licenses for their manufacturing premises in respect of such products with SARS before 1 June 2023 and to submit their first excise duty account by 28 July 2023.”<\/p>\n
“Special storage warehouses in respect of such products should similarly be licensed with SARS before 1 June 2023,” said the taxman.<\/p>\n
In February this year, Asanda Gcoyi, the CEO of Vapour Products Association SA (Vpasa), said that putting the excise tax on e-cigarettes will damage the industry.<\/p>\n
The CEO said that the government had not completed adequate impact assessments for the effect of the tax on an industry that amounted to R1.5 billion in 2022.<\/p>\n
She said the tax could lead to a 22% drop in sales.<\/p>\n
Concern over the tax imposition on vaping dates back to a standing committee on finance in September last year, where British American Tobacco South Africa said that the proposed duty could see the price of vape products more than double<\/strong>.<\/p>\n Gcoyi said in September that the average price of vape products could increase by 138% and e-liquid consumption drop by 36%. Both Gcoyi and British American Tobacco agreed that an aggressive tax would push consumers to the illicit market.<\/p>\n Vaping products are not covered by the Tobacco Products Control Act or the Medicines Act and are largely unregulated.<\/p>\n