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Regulatory News South Africa

Sin taxes up again, alcohol review on the way

Regular drinkers and even those who enjoy the occasional tipple can raise a glass to celebrate the fact that Finance Minister Pravin Gordhan has retained the same formula for increasing excises on their favourite alcoholic beverages.

However, there could be a reason for drowning sorrows next year as a discussion document will be published for public comment in July, probably the harbinger of heavier excise duties to come following a hint in last year's budget that the excise duty structure would be reviewed.

For this year, the percentages remain in line with the taxation formula that has been maintained for several years - 23% on wine, 33% on malt beer, 43% on spirits and 52% on tobacco products.

This year sees excise duties on sparkling wine rise by 4.5% to R6.97/litre, unfortified wine by 8.4% to R2.32/litre, fortified wine by 7.4% to R4.33/litre, malt beer by 7.5% to R53.97/ litre of absolute alcohol (not per litre of beer), alcoholic fruit beverages by 7.5% to R2.70/litre and spirits by 10% to R93.03 per litre of absolute alcohol.

Excise on cigarettes rises 8.9% to R9.74 per packet of 20, cigarette tobacco by 8.2% to R10.53/50 grams, pipe tobacco by 10.3% to R2.98/25 grams, and cigars by only 6% to R50.5/23 grams.

As was the case last year and in previous years traditional beer managed to again escape the excise tax net.

The bottom line for drinkers and smokers is this: a packet of 20 cigarettes will cost 80 cents more; a litre bottle of sparkling wine will cost 30 cents more; a 340ml can/bottle of beer will cost one cent more; and a 750ml bottle of spirits will cost R2.73 more.

Source: I-Net Bridge

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