South Africa’s 2025/26 budget includes proposed excise duty increases above the inflation rate: 6.75% for alcohol and 4.75% for tobacco products. Specific increases have been outlined for various alcoholic beverages and tobacco products, reflecting an effort to enhance fiscal policy and public health measures.
The South African government plans to increase excise duties on alcohol and tobacco for the 2025/26 financial year, exceeding the expected inflation rate. The adjustment includes a 6.75% rise for alcoholic beverages and a 4.75% increase for various tobacco products. The adjustments aim to simplify tax implementations by aligning them with the fiscal year starting on April 1, following legislative protocols established to manage unusual tobacco sales around budget announcements.
In response to public feedback, the government previously released a discussion paper titled “The Taxation of Alcoholic Beverages.” This paper proposes a revised three-tier progressive excise duty system for wine and beer, aiming for public consultations in 2025. Until these reforms are finalized, a 6.75% increase in alcohol excise duties is anticipated for the upcoming budget period.
Specific increases in excise duty rates include:
– Unfortified wine: from R5.57 to R5.95/litre
– Fortified wine: from R9.40 to R10.04/litre
– Sparkling wine: from R17.83 to R19.03/litre
– Ciders and alcoholic fruit beverages: from R135.89 to R145.07/litre of absolute alcohol
– Spirits: from R274.39 to R292.91/litre of absolute alcohol
– Cigarettes: from R21.77 to R22.81/20 cigarettes
– Cigarette tobacco: from R24.47 to R25.63/50g
These adjustments reflect the government’s commitment to aligning tax policies with health objectives and fiscal needs.
The proposed increases in excise duties on alcohol and tobacco for South Africa’s 2025/26 budget underscore the government’s strategy to address fiscal challenges while promoting public health. With significant adjustments in rates across various products, the government anticipates smoother implementation processes. Further discussions on a progressive alcohol tax framework will follow, potentially restructuring the taxation landscape in South Africa.
Original Source: www.zawya.com
