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2024 National Budget: Here’s how much more alcohol & cigarettes will cost you

21 February 2024 | eRadio News

With weak performance by South Africa’s economy resulting in a sharp deterioration in tax revenue collection for 2023/24, government has proposed tax measures to alleviate immediate fiscal pressure and support faster debt stabilisation.

Delivering the 2024 National Budget Speech, the last Budget Speech of the sixth administration, Finance Minister Enoch Godongwana said at R1.73 trillion, tax revenue for 2023/24 is R56.1 billion lower than estimated in the 2023 Budget.

“The shortfall is largely due to the decline in corporate profits and revenue from taxes on mining. Over the medium term, revenue projections are R45.6 billion higher than the 2023 MTBPS estimates, which increased personal income tax and additional medium term revenue proposals.

“This budget contains tax measures that will raise R15 billion in 2024/25 to alleviate immediate fiscal pressure and support faster debt stabilisation. Revenue is mostly raised through personal income tax by not adjusting the tax brackets, rebates and medical tax credit for inflation,” the Minister said.

For alcohol products excise duties, above-inflation increases of between 6.7 and 7.2% for 2024/25 are proposed. This means:

  • A can of beer increases by 14 cents;
  • A can of a cider and alcoholic fruit beverage goes up by 14 cents;
  • A bottle of wine will cost an extra 28 cents;
  • A bottle of fortified wine will cost an extra 47 cents;
  • A bottle of sparkling wine will cost an extra 89 cents; and
  • A bottle of spirits, including whisky, gin or vodka, increases by R5.53.

National Treasury also proposed to increase tobacco excise duties by 4.7% for cigarettes and cigarette tobacco, and by 8.2% for pipe tobacco and cigars.

This translates to:

  • A R9.51 cents increase for cigars;
  • A 97 cents increase to a pack of cigarettes; and
  • An extra 57 cents for a pipe of tobacco.

In addition, the Minister tabled an increase of the excise duty on electronic nicotine and non-nicotine delivery systems, known as vapes, to R3.04 per millilitre.

“On environmental taxes, the carbon tax increased from R159 to R190 per tonne of carbon dioxide equivalent as of 1 January 2024.  The carbon fuel levy will increase to 11 cents per litre for petrol and 14 cents per litre for diesel effective from 3 April 2024.

“A discussion paper outlining proposals for the second phase of the carbon tax will be published for public comment later in the year. Madam Speaker, we are mindful of the already high cost of living and the impact fuel prices have on food and transport costs.

“In this regard, we are proposing no increases to the general fuel levy for 2024/25. This will result in tax relief of around R4 billion. This is money back in the pockets of consumers,” the Minister said.

Social grants are expected to increase to keep in line with inflation and increase access for those who are eligible.

This does not include the Social Relief of Distress Grant (SRD Grant) also known as the R350 grant.

“We are sensitive to the increase in the cost of living for the nearly 19 million South Africans who rely on these grants to make ends meet. In this regard, we have done as much as the fiscal envelope allows,” Godongwana said.

The increases to be implemented during this year are as follows:

  • An increase of R100 to the old age, war veterans, disability and care dependency grants. This amount will be divided into R90 effective from April, and R10 effective October;
  • A R50 increase to the foster care grant; and
  • A R20 increase to the child support grant.

In the expanded Budget 2024 review, National Treasury explained that social grant expenditure – excluding the SRD grant – will increase from R217.1 billion in 2023/24 to R259.3 billion in 2026/27.

The COVID‐19 Social Relief of Distress Grant is allocated R33.6 billion in 2024/25 with provisional allocations for the 2025/26 and 2026/27.

“Work is currently underway to improve the COVID-19 Social Relief of Distress Grant by April this year. National Treasury will work with the Department of Social Development in ensuring that improvements in this grant are captured in the final regulations.

“These improvements will be within the current fiscal framework. For the extension of the grant beyond March 2025, the social security policy reforms, together with the funding source, will be finalised,” the Minister said.

National Treasury expects that grant beneficiaries, excluding those receiving the COVID‐19 SRD Grant, are projected to increase from 18.8 million in 2023/24 to 19.7 million in 2026/27.

 

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