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E-Cigarettes, Plastic Straws Next in South Africa’s Tax Sights

E-Cigarettes, Plastic Straws Next in South Africa’s Tax Sights

(Bloomberg) -- The South African government may start taxing e-cigarettes and plastic straws as it ramps up green and health taxes to boost revenue and change behavior.

In addition to doubling a levy on plastic bags from April, the government will consult on extending this charge to all single-use plastics for retail consumption including straws, utensils and packaging, from 2021, the National Treasury said in the budget review tabled in Cape Town on Wednesday.

The government will start taxing heated tobacco products immediately and intends to introduce a levy on electronic cigarettes next year.

“Globally, policymakers are looking at regulating and taxing these products due to concerns about their health effect,” the Treasury said.

These are some of the other green and health tax measures in the budget:

  • The carbon tax rate will increase by 5.6% for the 2020 calendar year.
  • Government proposes increasing the vehicle emissions rate for passenger cars to 120 rand ($7.90) per gram of carbon dioxide per emissions kilometer, and 160 rand for a double cab truck from April.
  • The levy on incandescent light bulbs will increase to 10 rand from 8 rand.
  • The plastic bags levy will increase to 25 cents from 12 cents.
  • Excise duties on all alcohol and tobacco products, excluding traditional African beer, will increase by between 4.4% and 7.5% and the general fuel levy will rise by 16 cents.
  • The government is also preparing an environmental fiscal reform paper.

To contact the reporter on this story: Paul Vecchiatto in Cape Town at pvecchiatto@bloomberg.net

To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Rene Vollgraaff, Robert Brand

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