The South African government will adjust excise duties on alcohol and tobacco in the 2025/26 fiscal year. Alcoholic beverages will see a 6.75% increase, while tobacco products will rise by 4.75%. Future adjustments will take effect on April 1 to ease administrative burden. A new progressive excise duty framework for alcohol is under consideration for public comments in 2025.
The South African government plans to increase excise duties on alcohol and tobacco products for the 2025/26 financial year, surpassing the anticipated inflation rate. The National Treasury’s Budget Review indicates a proposed 6.75% rise in excise duties on alcoholic beverages and a 4.75% increase for tobacco products, including cigarettes and vaping devices. Pipe tobacco and cigars will also see an increase of 6.75%.
To facilitate these adjustments, future changes to excise duties will be implemented from April 1. Legislative measures have been in place since 2021 to address unusual cigarette clearance around budget announcements, which may be extended.
Last November, a discussion paper was published regarding the taxation of alcoholic beverages, suggesting a progressive excise duty rate structure for wine and beer. Public consultations on this new framework are slated for 2025, although the government anticipates implementing a 6.75% increase for the upcoming financial year.
The specific duties for the 2025/26 financial year include: Unfortified wine to increase from R5.57 to R5.95 per litre, fortified wine from R9.40 to R10.04 per litre, and sparkling wine from R17.83 to R19.03 per litre. For ciders, the rate will rise from R135.89 to R145.07 per litre of absolute alcohol. Spirits will see an increase from R274.39 to R292.91 per litre of absolute alcohol, while cigarettes will go from R21.77 to R22.81 per pack of 20. Cigarette tobacco will increase from R24.47 to R25.63 for 50g.
In conclusion, the South African government’s proposal for the 2025/26 financial year includes significant adjustments to excise duties on alcohol and tobacco products, exceeding expected inflation rates. This initiative, aimed at easing future implementations, indicates forthcoming public engagement regarding changes in taxation policy, particularly for alcoholic beverages with a progressive rate structure. Details on specific duty increases highlight the continued fiscal strategy surrounding public health initiatives and revenue generation.
Original Source: www.zawya.com
