Budget speech: Here’s how much more you’ll have to pay for alcohol and cigarettes

Finance Minister Enoch Godongwana has increased the taxes on alcohol and cigarettes.

The minister made his second attempt to give his budget speech on Wednesday after it was postponed on 19 February.

While most of the focus has been on the staggered 1% value-added tax (VAT) increase, Treasury also had another notable increase.  

Alcohol and cigarettes to cost more

While not specifically mentioned in the speech, National Treasury’s detailed breakdown of the budget shows how much extra drinkers and smokers will be coughing up in the 2025/26 financial year.

Spirits, wine and beer will all be increasing by 6.75% from 1 April. However, traditional African beer will remain unchanged.

This will add an extra 16 cents onto a can of beer, an extra R1.20 to a bottle of sparkling wine and R6 to a bottle of spirits.

Excise duty on cigarettes and all other tobacco products, including vapes, will increase by 4.75% or an extra R1 on the average box of cigarettes.

Benefits for illegal traders

Convenor for the National Liquor Traders Council, Lucky Ntimane, was unhappy with the increase on alcohol excise duties, believing there were too many negative consequences.

“Increasing alcohol prices will result in liquor traders stocking less products because of affordability issues,” Ntimane told The Citizen.

“Downstream, it will mean consumers will also pay higher prices which means the sales will be impacted negatively.

“The biggest worry is that consumers will search for cheaper alternatives which are readily available in the illicit and counterfeit market, a market now worth over R20 billion annually,” Ntimane added.

Not ‘sin’ tax

Ntimane was adamant that if the illicit and counterfeit market could be considered a legal entity, it would be the second-largest company in the country.

“The biggest benefactor of a rise in excise tax is the illicit and counterfeit alcohol supplied by unscrupulous dealers,” said Ntimane.

He lamented the use of the term ‘sin tax’, stressing his organisation wrote to Godongwana and President Cyril Ramaphosa to end the use of the term.

“We are not a religious state where products are labelled as such and since then, the minister has never used the term ‘sin tax’. It is a word we don’t use anymore,” Ntimane concluded.

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