South Africa: Concern Over New Vaping Rules

The Free Market Foundation is concerned that the South African government’s plans for regulating vaping products will push more people back toward smoking combustible cigarettes and buying from the black market, reports BusinessTech.

“The South African government argues that e-cigarette and vaping products are harmful and warrant regulation,” the Free Market Foundation said. “However, e-cigarettes and vaping innovations are tobacco harm reduction products aimed at mitigating the adverse health impacts associated with combustible tobacco products.”

“The total excise duty to be levied on nicotine and a non-nicotine solution, e-cigarettes and vaping, will range from ZAR33.30 [$2.28] to ZAR346. Therefore, poorer communities suffering disproportionately from tobacco-related diseases would be more incentivized to continue smoking cigarettes than pick healthier alternatives.”

“In reality, smokers may simply opt for illicit products, which are cheaper and constitute 42 percent of the informal market for cigarettes. Additionally, illicit goods are more harmful since production standards are not adhered to.”

The illicit cigarette market in South Africa grew substantially during a temporary ban on tobacco and it has yet to shrink to pre-lockdown volumes.

“National Treasury’s proposals to tax e-cigarette solutions that contain no tobacco or nicotine may, in particular, be questioned by some stakeholders as it does not necessarily support the government’s stated policy intention of reducing the consumption of tobacco products,” said Webber Wentzel, a legal firm. “It also could stimulate the illicit trade in e-cigarettes as has happened in the tobacco sector.”

The proposed tax would go into effect Jan. 1, 2023, if passed.