Sin taxes in focus as government weighs higher alcohol excise

Stephen Grootes in conversation with Nomcebo Dlamini, from the South African Alcohol Policy Alliance on the ambitions by the government to increase the tax excise for alcohol and the impact that it would have on alcohol consumption in the country.

Listen to the interview in the audio player below.

The South African government is considering an increase in excise duties on alcoholic beverages, as National Treasury looks for ways to boost revenue and align tax policy with public health objectives.

Alcohol excise duties are typically adjusted annually, often in line with inflation. However, any increase above inflation would mark a more aggressive policy stance and could have a noticeable impact on retail prices across beer, wine and spirits.

The alcohol industry has warned that higher taxes could place additional strain on producers, distributors and retailers, particularly small businesses already facing rising input costs and subdued consumer demand. 

Public health advocates, meanwhile, have long called for higher alcohol taxes as a tool to reduce harmful consumption and ease pressure on the healthcare system. South Africa has one of the highest rates of alcohol-related harm globally, including traffic fatalities and violent crime.

Treasury has not publicly confirmed the scale or timing of any potential excise increase.

Speaking to Stephen Grootes on The Money Show, Nomcebo Dlamini, from the South African Alcohol Policy Alliance says the tax increases would have a positive impact on society at large.

"Raising of excise taxes is the most effective and cost effective way of reducing alcohol harm, and it's something we are supporting. The price of beer in our country is quite low, in some instances, the price is lower than a loaf of bread."

- Nomcebo Dlamini, South African Alcohol Policy Alliance

"WHO has evidence that whenever the price of alcohol is at a certain amount, there is less drinking. Even those that drink alcohol tend to consume less than they would if it was cheaper."

- Nomcebo Dlamini, South African Alcohol Policy Alliance

"Currently, young people are able to access alcohol easily. And if then, the price is higher then it would mean less people are drinking. This then speaks to the issue of what the country ends up spending in terms of non-communicable diseases because the country is currently spending almost R249 billion."

- Nomcebo Dlamini, South African Alcohol Policy Alliance

Scroll to the top of the article to listen to the full interview.