• April 19, 2024

South Africa: New Tobacco Tax

 South Africa: New Tobacco Tax
Image: Tobacco Reporter archive

Nicotine substitute solutions, including vaping products, are now subject to an excise duty of ZAR2.90 ($0.15) per mL in South Africa, effective June 1, reports Business Tech.

The forms that govern tobacco product excise have been amended to account for vaping products, according to the South African Revenue Service (SARS).

Manufacturers were required to apply for and obtain licenses from SARS for manufacturing premises before June 1, 2023, and must submit the first excise duty account by July 28, 2023.

“The tax will be detrimental to those using vaping to stop smoking as well as local small businesses—doing more harm than good,” said Kurt Yeo, co-founder of consumer group Vaping Saved My Life (VSML). “At face value, the tax will move the consumer to the intended purpose of vaping less. But with many of those who vape having switched from smoking to this safer alternative and now having to pay far more for the privilege, they might be forced to revert to smoking as a cheaper option.”

“Moreover,” said Yeo, “the excise overlooks that vaping is the most effective method for smoking cessation. So those who smoke and want to make the change will be dissuaded purely based on the price and will have to continue using the deadliest consumer product on the market, cigarettes.”

Many believe that the tax will lead to an increase in illicit products and growth of the black market, according to DFA.

“This tax is (also) going to wipe out a lot of small vaping businesses, and there is already evidence that it is promoting a black market for vaping products,” said Yeo.