Picture: 123RF/GIN SANDERS
Picture: 123RF/GIN SANDERS

The Treasury plans to raise an extra R1bn from increases in “sin taxes” on alcohol and tobacco products.

Smokers and drinkers will pay more for their habits, with the increase in excise duties on tobacco products expected to yield  R400m more and the increase in duty on alcoholic beverages an extra R600m.

The increases are above inflation at 7.4% (2.2% in real terms). Sparkling wine, pipe tobacco and cigars rise 3.8% each in real terms or 9% in nominal terms.

The Treasury has also proposed zero-rating additional items in terms of VAT — white bread flour, cake flour and sanitary pads —  from April 1 this year.

This will help mitigate the one percentage point rise in VAT in April 2018. The zero rating of these additional items will cost the fiscus R1.1bn.

In terms of the tax proposals, excise duty on a can of beer goes up  12c to R1.74, while the excise duty on a 750ml bottle of wine will rise 22c to R3.15. Duty on a 750ml bottle of sparkling wine goes up  84c to R10.16 and on a bottle of whisky it will rise R4.54 to R65.84.

Excise duty on a packet of 20 cigarettes will rise R1.14 to R16.66, and on a typical cigar it will go up about 64c to R7.80. No change was made to excise duty on sorghum beer.

From tough talk on saving Eskom and Sars, to increases on tax on alcohol and cigarettes - we take a look at which aspects of Finance Minister Tito Mboweni’s 2019 budget will hit close to home.

Fuel levies rise altogether 29c/l for petrol and 30c/I for diesel, with the general fuel levy up 15c/l for petrol and diesel from April 3; the Road Accident Fund (RAF) levy rises 5c/l to R1.98; and the carbon tax on fuel will be 9c/l.

The introduction of a carbon tax on fuel in June is expected to raise R1.8bn in 2019/2020.

The health-promotion levy, which applies to beverages with more than 4g of sugar content per 100ml, will rise from 2.1c/g to 2.21c/g from April 1 to avert an erosion in the value of the tax due to inflation. The first 4g are levy free.

Finance minister Tito Mboweni said in his budget speech that the Treasury will work with the departments of trade and industry and economic development on the possible introduction of an export tax on scrap metal.