Sin taxes rise by 3.4% as Godongwana defers effective date

While South Africans are being spared general tax increases for another year, smokers and drinkers will not be escaping the annual increases for their favourite vices.

However, unlike the previous cycle, the excise duties are half of what was imposed last year, remaining strictly in line with inflation.

BUDGET OVERVIEW

Tabling the 2026 Budget on Wednesday, Finance Minister Enoch Godongwana announced a 3.4% increase in duties on alcohol and tobacco products.

In a significant reprieve for consumers, these proposed increases do not come into effect immediately, as has been customary. Instead, the new rates will only become effective from the 1st of April.

The minister confirmed that stakeholder consultations regarding the alcohol excise review will continue throughout the year.

During his address, Godongwana emphasised the necessity of these adjustments.

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"Madam Speaker, increases to certain taxes are unavoidable. For 2026/27, excise duties on tobacco will be increased in line with inflation. This includes excise duty on electronic nicotine and non-nicotine delivery systems."

IMPACT ON ALCOHOL AND TOBACCO

The tax burden remains highest for spirits, which will see an increase of R3.20 per bottle. In the wine category, sparkling wine will cost 65 cents more per litre, while still wine will increase by 15 cents. For those consuming beer and ciders, the price will go up by only 8 cents for a 340ml can.

Tobacco products are seeing similar inflation-linked adjustments.

A packet of 20 cigarettes will cost 77 cents more, while heated tobacco sticks will go up by 58 cents.

Cigars will see the largest single-unit increase at R4.56 per 23 grams.

These increases also extend to electronic nicotine and non-nicotine delivery systems, ensuring all smoking alternatives are taxed consistently.