Alcohol, cigarettes and petrol to cost more as taxes are hiked in 2021 budget

Levy increase for Road Accident Fund will also affect motorists, while social grant recipients will receive tiny increases

24 February 2021 - 14:02
'Sin' taxes are being increased after the lockdown bans hit the fiscus hard.
'Sin' taxes are being increased after the lockdown bans hit the fiscus hard.
Image: Sebabatso Mosamo

The government’s decision to ban the sale of alcohol and tobacco products has hit it hard in the pocket as more than R24bn could have been collected in excise duty or “sin” taxes.

This is contained in budget documents tabled in parliament on Wednesday by finance minister Tito Mboweni as he presented his spending plans for the 2021/2022 financial year.

The documents show that before the national lockdown last year, Mboweni had projected to collect just under R49bn in excise duties, but this has come in at only R24.6bn, representing a shortfall of 47%.

The 2021 annual budget speech by the finance minister took place in Cape Town on February 24 2021. All eyes were on Tito Mboweni as South Africans were looking forward to a growth-inspiring budget. Things like fuel levies, sin tax and debt were increased while personal taxes were largely unchanged.

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Liquor and tobacco sales were prohibited for much of 2020 as part of government’s controversial measures to curb the spread of Covid-19.

The government is now increasing sin taxes and a packet of cigarettes will cost R1.39 more.

Drinkers of spirits such as vodka, gin, brandy and whisky will have to dig a little deeper into their pockets to procure their favourite tipple as Mboweni is raising the price of a 750ml bottle by R5.50.

Another big increase will be felt by smokers of cigars after the tax was raised by R7.71 per 23g of rolled cigar.

A can of malt beer rises by 14c per 340ml can.

Unfortified wine increases by 26c per 750ml bottle, and a similar size of fortified wine is up by 44c.​ A 750ml bottle of sparkling wine is up 86c.

The government is increasing sin taxes in 2021.
The government is increasing sin taxes in 2021.
Image: Nolo Moima

The general fuel levy will increase by 15c per litre, and the Road Accident Fund (RAF) levy will shoot up by 11c from April 7.

This will see the general fuel levy rise to R3.85 per litre of petrol and R3.70 per litre of diesel. The RAF levy jumps to R2.18 per litre for both petrol and diesel.

Turning to social grants, Mboweni has offered modest increases, below inflation.

The old age grant rises by R30 to R1,890 and from R1,880 to R1,910 for those above the age of 75.

The child support grant only increases by R15 to R460.

The care dependency grants, war veterans and disability grants have also been raised by R30.

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