The wages of sin

27 February 2011 - 02:29 By Rowan Philp

South Africa's smokers and drinkers netted government R21-billion last year - and "sin taxes" are set to grow further next year as gamblers are targeted.

The latest Budget Review document projects that sin taxes should bring in an extra R2-billion.

In his Budget, the Minister of Finance, Pravin Gordhan, slapped an extra 80c on the cost of a pack of 20 cigarettes, while wine lovers will pay an extra 30c a bottle.

However, analysts said sinners should brace themselves for much worse penalties next year following a review of excise rates, which is due for debate in July.

Excise taxes on booze overall were increased by 8% this week - twice the official rate of inflation - although those who drank traditional beers, such as sorghum, were spared an increase.

Last year, cigarette sales alone added R9.6-billion to the fiscus after yet another tax hike, but the National Council Against Smoking has called the new increase "inadequate" in forcing people to quit.

Beer drinkers contributed the second-largest windfall for the government in 2010/11, bringing in an extra R6.5-billion in tax.

Gordhan also created a guaranteed jackpot for SARS by proposing a 15% tax on all gambling wins of over R25000 from April next year.

And, to punish the sin of excess, those who spend more than R900000 buying a car will be hit with a 25% excise tariff.

X