From 1 April 2023, consumers of alcoholic beverages and tobacco products will have to dig deeper into their pockets for their favourite alcoholic drink. This is after Finance Minister Enoch Godongwana announced an increase in excise duties on alcohol in line with expected inflation of 4.9% for 2023/24.
The National Treasury has proposed guideline excise tax burdens for wine, beer and spirits of 11%, 23%, and 36% of the weighted average retail price, respectively. This is an above-inflation increase, which means consumers will have to pay more for their favourite alcoholic drinks. Sparkling wine has also been realigned to a policy decision taken in 2016 to peg it at 3.2 times that of natural unfortified wine.
The government has stated that the increase in excise duties is necessary to reduce the risk of alcohol-related harm and to contribute to economic growth and improved health outcomes. This money will be used to fund health, education and infrastructure projects.
The proposed increase in taxes has been met with both criticism and support. Those in favour of the move agree that it will help reduce the amount of alcohol-related harm in the country and will raise much-needed funds for health, education and infrastructure projects. On the other hand, those against the move argue that it is an attack on the working class, who will be the most affected by the increase.
Regardless of the debate, the increase in taxes is expected to take effect in April 2023. Consumers of alcoholic beverages and tobacco products will have to dig a little deeper into their pockets to indulge in their favourite brands.
Tags: Alcohol Prices Budget Speech