Belinda Beresford
Anyone wanting to follow American President Bill Clinton’s lead with Monica Lewinsky in developing novel uses for cigars had better stock up on their favourites before any enjoyment wanes in the face of a 3 669% increase in excise duty.
Cigar aficionados will pay an extra R7,33 per 23g in excise charges, up from just less than 20c. Deputy President Thabo Mbeki with his famous pipe is also going to face an impressive 166% rise in import duties on pipe tobacco. The increases are part of the government’s strategy to raise customs duty on tobacco products to try to encourage South Africans to just say no to the health- hazardous weed.
In his speech, Minister of Finance Trevor Manuel told Parliament that the expected hike in so-called sin taxes is intended to “contribute in this way to healthy living in this chamber and elsewhere”.
He also commented that brandy and Coke drinkers should rest easy. While the cost of their brandy may have gone up (spirits face a 6,5% increase in import duty), the price of Coke should come down. Mineral waters and soft drinks enjoy a more than 19% fall in excise duties, which translates to about 1c per 340ml can.
Rather hopefully, the Budget Review states: “It is trusted that the manufacturers of soft drinks will honour their commitment to pass on the reduction in excises to consumers in the form of lower retail prices.” So look forward to a drop in the cost of highly priced mineral water at upmarket gym chains.
The government intends to abolish excise taxes on carbonated soft drinks, but says it is unable to do so immediately for financial reasons.
Most alcoholic beverages will see a tax increase in nominal terms, with the exception of sorghum beer. The Budget Review notes that, contrary to their image in some quarters, South Africans are only moderate drinkers. The 1998 edition of World Drink Trends shows that consumption per capita is down around four to 4,9 litres per person – amateur stuff compared to survey leaders Portugal and Luxembourg. Both consume between 11 and 11,3 litres of absolute alcohol per head.
The government has aims to have total taxes on tobacco products at around 50%, which accounts for the jump in cigar excise duties. Smokers will pay about R2,45 in taxes on a pack of 20 cigarettes in the most popular price category.
Fuel is also going up: from April Fool’s Day the fuel levy on petrol will go up by 4c a litre. The government expects fuel consumption to rise by just less than 4% in the new financial year, with diesel usage up fractionally less.Belinda Beresford
Anyone wanting to follow American President Bill Clinton’s lead with Monica Lewinsky in developing novel uses for cigars had better stock up on their favourites before any enjoyment wanes in the face of a 3 669% increase in excise duty.
Cigar aficionados will pay an extra R7,33 per 23g in excise charges, up from just less than 20c. Deputy President Thabo Mbeki with his famous pipe is also going to face an impressive 166% rise in import duties on pipe tobacco. The increases are part of the government’s strategy to raise customs duty on tobacco products to try to encourage South Africans to just say no to the health- hazardous weed.
In his speech, Minister of Finance Trevor Manuel told Parliament that the expected hike in so-called sin taxes is intended to “contribute in this way to healthy living in this chamber and elsewhere”.
He also commented that brandy and Coke drinkers should rest easy. While the cost of their brandy may have gone up (spirits face a 6,5% increase in import duty), the price of Coke should come down. Mineral waters and soft drinks enjoy a more than 19% fall in excise duties, which translates to about 1c per 340ml can.
Rather hopefully, the Budget Review states: “It is trusted that the manufacturers of soft drinks will honour their commitment to pass on the reduction in excises to consumers in the form of lower retail prices.” So look forward to a drop in the cost of highly priced mineral water at upmarket gym chains.
The government intends to abolish excise taxes on carbonated soft drinks, but says it is unable to do so immediately for financial reasons.
Most alcoholic beverages will see a tax increase in nominal terms, with the exception of sorghum beer. The Budget Review notes that, contrary to their image in some quarters, South Africans are only moderate drinkers. The 1998 edition of World Drink Trends shows that consumption per capita is down around four to 4,9 litres per person – amateur stuff compared to survey leaders Portugal and Luxembourg. Both consume between 11 and 11,3 litres of absolute alcohol per head.
The government has aims to have total taxes on tobacco products at around 50%, which accounts for the jump in cigar excise duties. Smokers will pay about R2,45 in taxes on a pack of 20 cigarettes in the most popular price category.
Fuel is also going up: from April Fool’s Day the fuel levy on petrol will go up by 4c a litre. The government expects fuel consumption to rise by just less than 4% in the new financial year, with diesel usage up fractionally less.