Budget Speech: Smokers hit hard in the pocket

South Africans – especially those who smoke – will have to dig deeper into their pockets when they pay for cigarettes after Finance Minister Enoch Godongwana announced an increase on excise duties in his Budget Speech for the 2023/24 financial year.

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Godongwana delivered the National Budget on Wednesday, 22 February at the Cape Town City Hall.

INCREASE IN THE PRICE OF ALCOHOL AND CIGARETTES

Excise duties increase every year so it came as no surprise that alcohol, especially wine and spirits, will now be a few cents – or rands – higher.

A packet of 20 cigarettes went up by 98 cents while a 340ml can of beer rose by ‘only’ 10 cents.

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In last year’s 2022 Budget Speech, Godongwana announced a general increase in the sin tax on alcohol and tobacco by between 4.5% and 6.5%.

This year, government proposed an increase in the excise duties of 4.9% in line with expected inflation.

• A 340ml can of beer will now cost 10c more
• A bottle of wine will cost 18c more
• A bottle of 750ml spirits, including whisky, gin, or vodka, increased by R3.90
• A packet of 20 cigarettes costs an extra 98c more
• A 23 gram cigar will now cost R5.47 more

Godongwana said due to the difficult operating environment for the sugar industry from the impact of flooding and social unrest, the health promotion levy will remain unchanged for the following two fiscal years to enable the industry to diversify or restructure.

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BEER BREWERS BATTERED BY LOAD SHEDDING

Ahead of the Budget Speech, the Beer Association of South Africa (BASA) called on Godongwana to announce amendments to the current excise regime governing the alcohol industry.

The Association said ongoing power outages have impacted the entire beer value chain, with craft brewers who barely managed to keep their doors open during the Covid-19 pandemic most acutely affected.

“In particular, BASA is calling for the excise adjustment approach to be changed to one that is fixed, in line with (forecasted) inflation, thus creating much-needed tax certainty moving forward.

“It is critical that government focuses on enabling policies to encourage the recovery of this sector instead of the continued implementation of ones that prejudice the industry even further, particularly in light of the current load shedding crisis facing the country and putting the future of thousands of businesses at risk,” the Beer Association of South Africa said.