News

Inge Lamprecht
1 minute read
25 Feb 2015
2:06 pm

‘Sinners’ pay more – taxes on alcohol, cigarettes rise

Inge Lamprecht

Smokers and drinkers will have to dig somewhat deeper into their pockets to finance their guilty pleasures.

Sin tax

Finance Minister Nhlanhla Nene on Wednesday announced increases in taxes levied on several alcoholic beverages, cigarettes and tobacco.

Excise duties will be increased as follows:

  • the tax on a quart of beer goes up by 15,5 cents,
  • a bottle of wine will cost 15 cents more,
  • a bottle of sparkling wine goes up by 48 cents,
  • a bottle of whisky will be R3.77 more;
  • a pack of 20 cigarettes goes up by 82 cents.

The table below highlights the increases:

 pic

 Source: National Treasury

The Budget Review proposed an additional duty category for “grain-based fermented beverages” or “flavoured alcoholic beverages using 100% unconverted grains”.

“The rate for these beverages will initially be linked to the excise duty for beer, and may be reviewed to ensure a level playing field with fruit-fermented beverages,” the Review stated.

One reform that is being considered is excise duty relief to wine-based spirits such as brandy.

“The rationale is that brandy is at a cost disadvantage compared with other forms of alcoholic spirits, because it takes 4 to 5 litres of wine to produce a litre of brandy. Sparkling wine accounts for a very small proportion of alcoholic beverage sales and the nature of this market results in large price discrepancies. This may require a review of the way the excise duty on sparkling wine is calculated,” the Review stated.

Topics: tobacco, alcohol, Budget 2014, finance minister, Nhlanhla Nene, excise duties, sin taxes, beer, spirits, African beer, cigarettes.