BUDGET 2024 | Drinkers and smokers to pay more

Faced with dwindling tax revenue amid rising spending requirements, finance minister Enoch Godongwana has hit drinkers hard in the pocket, raising sin taxes by up to 7%.

Godongwana made the announcement in parliament on Wednesday when he presented the 2024/2025 budget.

The above-inflation increases on sin taxes come as the government seeks to raise an additional R15bn in taxes to fund spending as tax revenue for the 2023/2024 financial year has come in lower than projected in last year’s budget.

Sin taxes and customs duties are the fourth-biggest contributors to government’s tax revenue base and are projected to generate R141.8bn in 2024/2025.

Smokers and drinkers will now be required to dig deeper into their pockets, as they are due for the following increases:

• A 750ml bottle of spirit will cost R5.53 more;
• A bottle of sparkling wine rises by 89c;
• Fortified wine will cost 47c more;
• A packet of 20 cigarettes will cost 97c more;
• Puffing away at a 23g cigar will cost R9.51 more;
• A 340ml can of malt beer or cider goes up by 14c; and
• Vaping will cost 14c per ml.

“Excise duties have increased more than inflation in recent years, resulting in higher tax incidence. Government proposes to increase excise duties on alcoholic beverages by between 6.7% and 7.2% for 2024/25,” reads the National Treasury’s budget review document.

“The guideline excise tax burden as a percentage of the retail selling price of the most popular brand within each tobacco product category is currently 40%. Government proposes  to increase tobacco excise duties by 4.7% for cigarettes and cigarette tobacco and by 8.2% for pipe tobacco and cigars for 2024/2025.

“Government introduced an excise duty on electronic nicotine and non-nicotine delivery systems, colloquially referred to as vaping, with effect from June 1 2023 at a flat rate excise duty rate of R2.90 per millilitre on both nicotine and non-nicotine solutions.

“Government proposes to increase these excise duties in line with expected inflation to per millilitre for 2024/2025.”

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