The South African government is planning to increase excise duties on alcohol by 6.75% and on tobacco by 4.75% for the 2025/26 financial year. Specific duty rates will increase for various alcoholic products and tobacco items, effective from April 1 in future years. Public consultations regarding a new alcohol excise taxation structure are expected in 2025.

In the upcoming 2025/26 financial year, the South African government plans to increase excise duties on alcohol and tobacco products, exceeding the anticipated inflation rate. As outlined in the 2025 National Treasury Budget Review, the excise duty on alcoholic beverages will rise by 6.75%, while the duty on tobacco products, including cigarettes, will increase by 4.75%. Notably, pipe tobacco and cigars will also see a 6.75% increase.

To simplify the implementation of these adjustments, the National Treasury has stated that future changes to excise duties will take effect on April 1. Additionally, since 2021, there have been legislative provisions concerning unusual cigarette clearances around Budget announcements, which may continue.

The government is currently engaging the public on an alcohol excise taxation policy framework, as seen in a discussion paper published last November. This paper includes a proposal for a progressive excise duty rate structure for wine and beer, with public consultations scheduled for 2025 to finalize the new framework.

For the 2025/26 financial year, specific changes to excise duties are as follows: Unfortified wine will increase from R5.57 per liter to R5.95, fortified wine from R9.40 to R10.04, and sparkling wine from R17.83 to R19.03. Ciders and alcoholic fruit beverages will rise from R135.89 to R145.07 per liter, while spirits will go from R274.39 to R292.91. Regarding tobacco, cigarettes will increase from R21.77 to R22.81 for twenty cigarettes, and cigarette tobacco from R24.47 to R25.63 for 50 grams.

The intended adjustments to excise duties on alcohol and tobacco reflect the government’s strategy to address public health concerns and generate revenue, while exceeding projected inflation. The proposed increases show a continued commitment towards enhancing the taxation framework for both sectors. The government is also embracing public dialogue to reshape the alcohol taxation policy effectively for the future.

Original Source: www.zawya.com