Belinda Beresford
If you’re one of those people who finds it irritating listening to the ubiquitous ringing of telephones over dinner, on the golf course or – most odious of all – at the movies, you’ll find it hard to resist cheering at the news that cellphone imports are to be hit with customs duties.
Along with some other dubious “necessities” of life, including caravans, alloy wheels and domestic dishwashers, cellphones are now subject to a 10% ad valorem (value-related) excise tax. The move is part of the government’s strategy to extend customs taxes to “non-essential or luxury” items.
If you’re one of those people who can’t survive without your little ringing friend, and object to it being classified as non-essential, there is some consolation in a reduction of customs duty on other luxury items.
Whether the fall in tax from 15% to 10% on a range of goods including watches, beauty preparations and spectacles will filter through to the consumer is another matter.
As expected, “sin taxes” have risen again. In keeping with its intention to set customs duties for tobacco products at about half the retail prices, excise taxes have risen a hefty 29%. This translates into another 46c for a packet of 20 cancer sticks.
The government acknowledged in the budget that higher taxes provided a greater incentive for smuggling and “related criminal activities” and compared South Africa’s 50% tobacco duty to those of around 40% in Zimbabwe and 35,8% in Mozambique.
If you feel like celebrating the overall fall in income taxes, sparkling wine imports face a nominal 15% increase in excise duty (which translates into a real increase of roughly 9% once estimated inflation is taken into account). For the more aesthetic, mineral water and soft drinks are not going to see any rise in customs duties. Given that the government is assuming inflation will be around 6% this year, this translates into a real fall in excise taxes.
The budget is designed to tax alcohol content and to bring prices into line with international trends. Cider drinkers and fans of alcoholic fruit beers are going to be particularly hard hit. If your favourite tipple is something exotic like alcoholic lemonade, brace yourself for a nominal 36% rise in excise duties.
If you’re feeling thrifty, then fill up your car before April 1, when the fuel levy is going to rise by 10c per litre. The government estimates this will raise an extra R1,66-billion in revenue against a trade-off of a less than 0,5% rise in the consumer price index.
The spirit of equality is now also being applied to the taxation of spirits. Regardless of origin, for example grain or cane, spirits will all now face R27 a litre in excise duty.