South Africa is expected to increase excise duties, or sin taxes, for alcohol, vape, and smoking products. The government's 2024 Budget, due to Finance Minister Enoch Godongwana's presentation next week, is expected to address the issue of illicit trade, particularly in cigarettes. The Transnational Alliance to Combat Illicit Trade (TRACIT) report by Business Unity South Africa (BUSA) suggests that South Africa could have incurred tax losses of nearly R100 billion per year due to the rampant trade of illicit goods.
PwC expects a simple increase in excise duties for alcoholic beverages and tobacco, with guidelines for wine, beer, spirits, and tobacco brands. Budget 2023 announced a general increase in excise duty on alcohol and tobacco in line with expected inflation. An inflationary increase to excise duties is expected to be announced in Budget 2024 and pending the finalisation of policy reviews.
Vaping products will also face tax increases. In 2022, the government introduced a flat excise duty for nicotine and non-nicotine vaping products of R2.90/ml, effective from 1 June 2023. PwC expects an inflationary increase to this duty.
