‘Sinners’ pay more – taxes on alcohol, cigarettes rise

Finance Minister Nhlanhla Nene on Wednesday announced increases in taxes levied on several alcoholic beverages, cigarettes and tobacco.

Excise duties will be increased as follows:

• the tax on a quart of beer goes up by 15,5 cents,
• a bottle of wine will cost 15 cents more,
• a bottle of sparkling wine goes up by 48 cents,
• a bottle of whisky will be R3.77 more;
• a pack of 20 cigarettes goes up by 82 cents.

The table below highlights the increases:

 Source: National Treasury

The Budget Review proposed an additional duty category for “grain-based fermented beverages” or “flavoured alcoholic beverages using 100% unconverted grains”.

“The rate for these beverages will initially be linked to the excise duty for beer, and may be reviewed to ensure a level playing field with fruit-fermented beverages,” the Review stated.

One reform that is being considered is excise duty relief to wine-based spirits such as brandy.

“The rationale is that brandy is at a cost disadvantage compared with other forms of alcoholic spirits, because it takes 4 to 5 litres of wine to produce a litre of brandy. Sparkling wine accounts for a very small proportion of alcoholic beverage sales and the nature of this market results in large price discrepancies. This may require a review of the way the excise duty on sparkling wine is calculated,” the Review stated.

Topics: tobacco, alcohol, Budget 2014, finance minister, Nhlanhla Nene, excise duties, sin taxes, beer, spirits, African beer, cigarettes.