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Smokers and drinkers will now be forking out extra cash for their favourite brands of smokes and alcohol.
This follows Finance Minister Enoch Godongwana’s Budget Speech on Wednesday, 23 February 2022, where he highlighted, “Excise duties on alcohol and tobacco will increase by between 4.5% and 6.5%.”
This means you can expect to see the following price changes:
- A 340ml can of beer or cider will cost 11c more.
- A 750ml bottle of wine will be 17c more expensive.
- A bottle of sparkling wine will cost an additional 76c.
- A bottle of spirits will be R4.83 more expensive.
- A packet of cigarettes will cost an additional R1.03.
- 25 grams of piped tobacco will cost an extra 37c.
- A 23 gram cigar will be R6.77 more expensive.
“Government also proposes to introduce a new tax on vaping products of at least R2.90 per millilitre from 1 January 2023,” the Minister explained.
On top of this, a new tax will also be introduced on beer powders.
Patricia Pillay, CEO of the Beer Association of South Africa (BASA), says the Association notes Finance Minister Enoch Godongwana’s announcement that excise beer products will see a 5.5% increase, which is in line with inflation.
“While we are pleased that the local beer industry was not faced with another above inflation increase, we are disappointed that the Minister failed to address the issue of relief for our smaller craft brewers in particular,” she says.
Moreover, Pillay adds that these breweries have received zero compensation from government to date, despite the previous four alcohol bans totalling 161 days (just over four months) between March 2020 and July 2021 are still rebuilding their businesses. With no relief offered and another increase in excise, their sustainability as a sector remains at risk.
“BASA will therefore be writing to Minister Godongwana to request a meeting to discuss relief measures as well as a new tax policy going forward that recognises and incentivises lower-alcohol products such as beer,” Pillay notes.
She further explains that not only would this create more jobs at a time when our expanded unemployment rate sits at 46%, but it will also encourage people to drink in moderation by buying cheaper, lower alcohol products.
“As BASA, we are committed to working with National Treasury to increase the role the beer industry plays (which already employs over 450 000 people), in particular small businesses within the sector, in creating inclusive economic growth in South Africa.”
With this in mind, she emphasises that BASA and its members are committed to working with the government, ensuring the industry and South Africa makes a strong recovery and thrive again.
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