Excise duties on tobacco products and alcohol have been raised by 8 per cent in the latest budget review presented by South African Finance Minister Tito Mboweni, reports Bloomberg.

The tobacco and alcohol industries in South Africa were hoping to avoid an increase in the so-called sin taxes after already being hit hard by coronavirus restrictions in early 2020. Although tax increases on tobacco products and alcohol are standard in every budget, the two industries had lobbied the government to grant them a reprieve this year, according to Bloomberg.
However, while taxes in most other industries remained the same and plans by the Treasury to raise an additional ZAR 40 billion (USD 2.8 billion) from other sources were put on hold, sin taxes were raised by 8 per cent in the budget review. This means that tobacco companies may have to hold off on expansion plans. The tax increase could also boost the production and sale of illicit tobacco and alcohol products in the country.