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SA to cough up more for fuel, alcohol and tobacco, old age grants up by R80

26 February 2020 - 14:45 By ANDISIWE MAKINANA
Finance minister Tito Mboweni ahead of the 2020 budget presentation in parliament on Wednesday.
Finance minister Tito Mboweni ahead of the 2020 budget presentation in parliament on Wednesday.
Image: Sunday Times/Esa Alexander

South Africans will pay even more for alcohol and tobacco following yet another increase on sin taxes, announced by finance minister Tito Mboweni on Wednesday.

Bubbly lovers could think twice before popping that champagne, as excise duty on sparkling wine is set to go up by 6% from R13.55 to R14.36 a litre.

Excise duty on a 340ml can of beer goes up by 4.4% from R1.74 to R1.81. The same goes for cider and other alcoholic fruit drinks.

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The duty on a 750ml bottle of spirits such as vodka, gin and whisky will jump from R65.84 to R68.73.

An option would perhaps be sticking with traditional African beer which will not be affected by the increases.

The excise duty rate on an unfortified 1 litre bottle of wine will go up by 19c from R4.20 to R4.39 and from R7.03 to R7.34 for a litre of fortified wine.

Mboweni announced that the duty on a pack of 20 cigarettes will go up by 74c from R16.66 to R17.40, while duty on a typical 23g cigar will go up by 7.5% to R6.73.

To adjust for inflation, the government proposes to increase the general fuel levy by 16c a litre and the Road Accident Fund levy by 9c a litre from April 1 - for a total of 25c on a litre of fuel.

Finance minister Tito Mboweni announced yet another increase on sin taxes.
Finance minister Tito Mboweni announced yet another increase on sin taxes.
Image: Nolo Moima

Treasury documents show that taxes on alcohol and tobacco are determined within a policy framework that targets the excise-duty burden.

“The excise burdens for most types of alcoholic beverages and tobacco products currently exceed the targeted level as a result of above-inflation increases and price fluctuations,” reads the 2020 budget review.

“Government will increase most excise duties by an amount that matches expected inflation of 4.4% for 2020/21, and by 6% in the case of sparkling and 7.5% for pipe tobacco and cigars.”

While it may be tough times for “sinners”, social grant recipients have something to smile about as the grants that provide relief to millions of poor households are set to increase in April.

Mboweni announced that old age, disability, war veterans and care dependency grants will increase by R80 to R1,860 a month. The foster care grant will go up by R40 to R1,040, while the child support grant will increase by R20 in April from R425 to R445.

Social grants are set to increase in April.
Social grants are set to increase in April.
Image: Nolo Moima

Over the next three years, the total number of social grant beneficiaries is expected to increase by almost a million to about 19-million by 2022/23, according to the Treasury's budget review document.

It also shows that funds amounting to R406.2m in 2020/21, R517.3m in 2021/22 and R626m in 2022/23 are reprioritised - mainly to the early childhood development conditional grant.

As a result, the subsidy rate per child will increase by 23.8% from R15 in 2019/20 to R18.57 in 2022/23.

By 2022/23, government estimates it will provide access to early childhood development services to almost 700,000 children under the age of four.

Hundreds of women protested outside the parliament gates in Cape Town on February 26 2020, ahead of finance minister Tito Mboweni’s annual budget speech. Representing various organisations, the women called for greater budget allowances for social grants and the fight against gender-based violence.