South Africa: Treasury Outlines Vapor Taxation Proposal

South Africa’s National Treasury has outlined a proposal on the taxation of electronic nicotine-delivery systems (ENDS), reports BusinessTech.

Among other measures, the agency is considering taxes on hardware and e-liquids, with higher nicotine products attracting higher levies than low-nicotine varieties.

While the market for ENDS is still in its infancy in South Africa, the National Treasury expects it to grow. The agency says it wants to learn from the experience of other countries where growth of ENDS has raised concerns about underage consumption. The agency said it is also aware of concerns about the potential of ENDS to undermine global tobacco control efforts and public health.

Vaping products are covered neither by South Africa’s Tobacco Products Control Act nor by the country’s Medicines Act. The government has proposed the Control of Tobacco Products and Electronic Nicotine-Delivery Systems Bill in which it hopes to regulate vapor products in a similar way as cigarettes.  

The bill was introduced for public comment in 2018 but remains in a draft form.

According to a 2021 study commissioned by the Vapor Products Association of SA, the vapor industry in 2019 contributed ZAR2.49 billion to South Africa’s GDP while paying ZAR710 million in taxes. More than 350,000 South Africans use vapor products.