Photo for illustration: iStock
Finance minister Enoch Godongwana had bad news for South Africans with guilty pleasures announced an increase in some sin taxes in his 2023 budget speech.
Godongwana said taxes on alcohol and cigarettes will increase this year, while the sugar tax remains unchanged.
After a review in 2022 – which included the impact of flooding and social unrest on the sugar industry – the levy will remain unchanged for the next two fiscal years.
The hold on the sugar levy will enable the industry to diversify or restructure.
As of January this year, the sugar industry was set to lose R723 million to load shedding as the power outages affect 1 135 irrigated growers who employ more than 10 000 workers.
Apart from the tax rebates, businesses in the industry also asked government to consider restricting load shedding to stage 4 in cane growing areas during peak watering times.
Before Godongwana’s budget speech, the SA Canegrowers association said government’s health promotion levy was “destructive and unsubstantial”.
The sugar tax was first implemented in 2017 and came into effect in April the following year, with the goal of lowering diabetes and obesity in South Africa.
These initiatives, however, could result in thousands of jobs being lost. By scrapping the sugar tax, SA Canegrowners say Godongwana could save the livelihoods of millions in rural communities.
The following increases can be expected on alcohol and tobacco which, according to Godongwana, is in line with expected inflation:
The alcohol review paper will be published by Treasury in the coming days, while the tobacco review paper will be published later in the year.
ALSO READ: ‘Sin tax’ industries place more pressure on finance minister
As for illicit trade, Godongwana said Sars had taken steps over the previous years to “enhance its effectiveness in combatting […] tobacco trade”.
He added: “To this end, Sars has completed 2 316 seizures of cigarettes and tobacco products to the value of R598.8 million.”
“An additional R18 billion worth of schedules and assessments have been raised, targeting syndicated tobacco-related crimes,” Godongwana said.
Furthermore, Sars has collected more than R1.2 billion in revenue and handed over 92 cases for criminal proceedings with the NPA of which two resulted in successful convictions relating to tobacco smuggling syndicates.
The fuel levy also remains unchanged for the second consecutive year.
The General Fuel Levy remains at 18% of the retail price, and the Road Accident Fund levy will remain at about 10%.
In order to limit the impact of the energy crisis on the cost of living, Godongwana said the diesel levy will be extended to manufacturers of foodstuffs until 31 March 2025.
ALSO READ: Budget speech 2023: Combating climate change and energy crisis in SA
Download our app and read this and other great stories on the move. Available for Android and iOS.
