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Sin tax hikes in the interest of health, explains Mboweni

The increase in excise duties on cigarettes and alcohol was fairly predictable, with Minister Tito Mboweni explaining their decision as one not only motivated by raising, but also in the interest of health.

© koloj/123rf.com

JOHANNESBURG – The Finance Minister raised the stakes on sin taxes in his 2021 budget, and it seems that there could be further price hikes still to come - especially for smokers.

The increase in excise duties on cigarettes and alcohol was fairly predictable, with Minister Tito Mboweni explaining their decision as one not only motivated by raising, but also in the interest of health.

“It is clear that the excessive alcohol consumption in our country can lead to negative social and health outcomes. Consumers do react to price increases, and higher prices should lead to lower consumption of alcohol products – with positive spin-offs.”

Buried in the budget review documents is a signal that smokers are in for a rough ride.

The World Health Organisation (WHO) released a paper that suggests that, predictably, that higher cigarette prices cause more people to quit smoking.

In South Africa, around 40% of the price you pay for a box of cigarettes goes to the fiscus.

The WHO suggests that to achieve the health benefits, that should be closer to 70%. Treasury has taken note of this.
So, if you are a smoker who can’t or just doesn’t want to quit, best you get saving.

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