The South African government will increase excise duties on alcohol by 6.75% and tobacco by 4.75% for the 2025/26 financial year, with specific rates proposed for various products. Legislative measures will ease future adjustments, and consultations on an updated taxation framework for alcoholic beverages will take place in 2025.
The South African government will adjust excise duties on alcohol and tobacco products for the 2025/26 financial year, raising them above the expected inflation rate. Specifically, the proposed increase for alcoholic beverages is set at 6.75%, while tobacco duties will rise by 4.75% for cigarettes, cigarette tobacco, and e-cigarettes, with pipe tobacco and cigars also seeing a 6.75% increase.
To streamline administrative processes, future adjustments to excise duties are slated to take effect on April 1. Legislative measures addressing unusual cigarette clearances at Budget announcements will continue, as stated by National Treasury. Last November, a discussion paper titled “The Taxation of Alcoholic Beverages” invited public commentary and proposed a new progressive excise duty framework for wine and beer.
National Treasury noted that complete details of this excise taxation framework will only be finalized post-Budget, hence the decision to raise excise duties by 6.75% for alcoholic beverages in 2025/26. The specific changes in excise duties for various products include:
– Unfortified wine: Proposed rate R5.95/litre (current rate R5.57/litre).
– Fortified wine: Proposed rate R10.04/litre (current rate R9.40/litre).
– Sparkling wine: Proposed rate R19.03/litre (current rate R17.83/litre).
– Ciders and alcoholic fruit beverages: Proposed rate R145.07/litre (current rate R135.89/litre).
– Spirits: Proposed rate R292.91/litre (current rate R274.39/litre).
– Cigarettes: Proposed rate R22.81/20 cigarettes (current rate R21.77/20 cigarettes).
– Cigarette tobacco: Proposed rate R25.63/50g (current rate R24.47/50g).
These adjustments reflect the government’s approach to both managing public health and increasing revenue through higher taxation on consumable products deemed harmful.
In summary, the South African government’s decision to raise excise duties on alcohol and tobacco for the 2025/26 financial year signals a commitment to align taxation with health objectives and economic needs. The changes entail significant increases across various products, with structured implementation to ease the administrative burden. As the government finalizes a new taxation framework for alcoholic beverages, it remains focused on public consultation and progressive taxation.
Original Source: www.zawya.com
