South Africa Confirms Excise Duty Hikes on Tobacco and Vaping Products

Philippines tobacco excise tax 2025

South Africa’s Finance Minister Enoch Godongwana has confirmed increases in excise duties on tobacco and vaping products in the latest iteration of the budget, dubbed “Budget 3.0,” presented on May 21, 2025. While a controversial VAT hike was scrapped, consumers of cigarettes and alternative nicotine products like vapes will face higher prices.

The excise duty on cigarettes and tobacco products is set to rise by 4.75%. This increase will also apply to vaping products and other alternative nicotine delivery systems, which have seen a surge in popularity, particularly in urban centers within provinces like Gauteng. This translates to approximately R1 more per pack of traditional cigarettes, with a similar percentage increase expected for vape products.

These “sin tax” hikes, first proposed in March, were confirmed in supplementary budget documents. The government aims to generate additional revenue while addressing public health concerns associated with these products. According to Lucky Ntimane of the National Liquor Traders Council, while the increases were anticipated (having been previously set at inflation plus 2%), the government’s ability to raise substantial new revenue solely from excise is limited, suggesting the hikes might be more symbolic in their revenue impact but still tangible for consumer budgets.

The continued rise in excise duties has been welcomed by health activists, who argue it can contribute to reduced consumption. However, concerns remain that significant price increases could also fuel black market trade for untaxed tobacco and vape goods, potentially impacting small businesses and vulnerable households in economic hubs like Gauteng.

Matthew Ma
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