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 b...

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