Lobby groups call for 100% tobacco tax hike

South African collected R12.5 billion in tobacco tax in the last tax year while tobacco’s harmful effects have cost the state more than R42 billion in healthcare costs and lost productivity, according to an estimate by a 2020 REEP study


Anti-tobacco lobby groups have called for a 100% increase in tobacco tax ahead of the mid-term budget speech this week.

Forming a campaign called #protectournext, the National Council Against Smoking (NCAS), CANSA, the South African Medical Research Council (SAMRC) and the Heart and Stroke Foundation SA have called for a tax increase on tobacco products in order to reduce consumption and easing the burden on the public health system.

“These small tax increases below inflation actually end up making cigarettes more affordable over time. They are simply not enough to make people think twice about smoking and do not address the high cost burden of tobacco,” said Savera Kalideen, executive director of NCAS. The 2020 tobacco excise tax increase announced in February was 74c per pack of 20, lower than 2019 (R1.14) and 2018 (R1.22).

The groups also suggested during the hard lockdown when tobacco sales were banned, consumers showed they could stand to pay more for tobacco products.

The ban also provided revealing data on the motivation to quit smoking. A study conducted by the Research Unit on the Economics of Excisable Products (REEP) found that nearly 30% of respondents who smoked indicated that they had tried to quit during the lockdown, largely due to higher prices.

Many determined smokers who could access cigarettes continued to pay soaring prices for illicit
cigarettes.

“While it’s clear that better support must be given to those who want to quit, lockdown has
shown that some smokers will pay higher prices for tobacco products, although this was in the context
of it being a temporary situation,” noted public health and development consultant Zanele Mthembu.

South African collected R12.5 billion in tobacco tax in the last tax year while tobacco’s harmful effects have cost the state m re than R42-billion in healthcare costs and lost productivity, according to an estimate by a 2020 REEP study, he pointed out. Tax paying South Africans, Kalideen concluded, were subsidising the cost of tobacco use to the economy and this cost had to be redirected to the industry.

At the peak of the Covid-19 pandemic’s scourge in South Africa in July, British American Tobacco South Africa (Batsa) decried the ban on tobacco products which had cost the country more than R4 billion in tax revenue and led to the industry shedding 30 000 jobs.

The ban led to various organisations highlighting concerns over the illicit tobacco trade which boomed during the hard lockdown period, despite black market prices for cigarettes increasing as much as 100%.

Simnikiweh@citizen.co.za

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