A hike in sin tax and fuel levy
South Africans will have to reach deeper into their pockets to pay for alcohol, cigarettes and fuel.
Finance Minister Tito Mboweni delivered the all-important budget speech on Wednesday afternoon where he announced the increase in excise duties.
Mboweni said consumers can expect to pay more to keep up with the rising inflation.
"From today:
A 340ml can of beer or cider will cost only an extra 8c
A 750ml bottle of wine will cost an extra 14c
A 750ml bottle of sparkling wine an extra 61c
A bottle of 750 ml spirits, including whisky, gin or vodka, will rise by R2.89
A packet of 20 cigarettes will be an extra 74c
A 25 gram of piped tobacco will cost 40c more
A 23 gram cigar will cost an extra R6.73
I am again happy to report that there is no increase in the price of sorghum beer," Mboweni declared.
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Value Added Tax (VAT) will remain at 15%, despite many economists predicting that it would be raised to 16%. The decision not to hike taxes was make due to the country's weak economy. The country's national debt is projected to be at R3.56 trillion by the end of 2020/2021, translating into 65.5% of the gross domestic product (GDP).
South Africans will also contribute more fuel due to an increase in the fuel levy.
"The fuel levy goes up by 25 cents per litre, of which 16 cents is for the general fuel levy and 9 cents is for the Road Accident Fund levy," he added.
But there's another catch - heated tobacco products will now also be taxed.
Previously, vapers and users of e-cigarettes paid no tax for their vice.
"The rate will be set at 75 per cent of the rate of cigarettes. Electronic cigarettes, or so-called vapes, will be taxed from 2021," said Mboweni.