‘Sinners’ to cough up a chunk more

IF YOU enjoy a cigarette with your rum and coke, your wallet will face a triple threat this year.

Finance Minister Pravin Gordhan’s budget increases the so-called “sin taxes” – excise taxes on tobacco and alcohol – to raise revenue of R5.1-billion and makes way for the introduction of a sugar tax on sugar-sweetened beverages later this year.

The excise duty rate for beer, wine and spirits will increase by between 6.1% and 9% while the rate for tobacco products will rise between 8% and 9.5%.

While the price of traditional African beer and beer powder will remain unaffected, South Africans will be paying more for their tipple come April 1.

Beer will cost approximately 11c more for a 340 ml can, while unfortified wine will increase by 30c a litre. Fortified wine will see an increase of 35c/l.

Those with a champagne lifestyle will be paying 93c/l more. Spirits will cost R4.43 a bottle more. South Africans’ penchant for expensive cigars means that a higher than inflationary increase is on the cards for these, translating into an additional cost of R6.58 per 23g. A pack of 20 cigarettes will cost R1.06 more while cigarette tobacco prices will rise by R1.19 per 50g, and pipe tobacco by 40c per 50g. Gordhan, meanwhile, said the proposed tax on sugary drinks “will be implemented later this year once details are finalised and the legislation is passed”.

The design of the tax has been reworked from the Treasury’s original policy paper and will now include added sugar as well as “intrinsic” sugars found in 100% fruit juice.

The tax will be calculated at a cost of 2.1c/g of sugar content in excess of 4g/100ml.

The 2017 budget review document says that the Treasury’s “preliminary socio-economic impact assessment shows a relatively small effect on job losses, most of which can be prevented if companies reformulate their products”. — TMG