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R1.03 increase in Cigarette Price while 25 grams of piped tobacco will cost an extra 37c. – 2022 Budget Speech

Article by: Emma Clayfield

South African Finance Minister Enoch Godongwana has today tabled the 2022 budget speech to the members of the National Assembly.

Excise duties on alcohol and tobacco will increase by between 4.5% and 6.5%, Finance Minister Enoch Godongwana has announced.

Delivering his Budget Speech on Wednesday, the Minister said: “The increases mean that as from today, a 340ml can of beer or cider will cost 11c more; A 750ml bottle of wine will be 17c more expensive; a bottle of sparkling wine will cost an additional 76c.”

Other increases will see a bottle of spirits become R4.83 more expensive.

During the same period, a packet of cigarettes will cost an additional R1.03; while 25 grams of piped tobacco will cost an extra 37c.

“A 23 gram cigar will be R6.77 more expensive. Government also proposes to introduce a new tax on vaping products of at least R2.90 per millilitre from 1 January 2023. A new tax will also be introduced on beer powders,” said the Minister.

Headline inflation is projected at 4.8% in 2022 and 4.4% in 2023, National Treasury said on Wednesday. 

This is attributed to food and energy prices, especially municipal rates from rising electricity prices, high domestic food inflation and elevated fuel prices, which are expected to be the key sources of inflationary pressure in 2022.

“Fuel prices were up 40.4% in the year to December 2021 owing to higher global crude oil prices.

“Fuel prices are expected to ease during 2022, but [they] remain elevated and above the 2019 average price level.

“Global supply-demand imbalances triggered an acceleration in the price of raw materials and intermediate inputs, which will continue to put upward pressure on consumer inflation.

“Medium‐term risks to the inflation outlook are to the upside, primarily as a result of price pressures from food and non‐alcoholic beverages, along with petrol, energy and other administered prices.

“Although the forecast assumes 2022 and 2023 electricity prices rise in line with Eskom’s application for a tariff increase in 2022/23, there is a risk that electricity inflation may exceed the assumption due to increasing costs of ensuring electricity supply,” said Treasury in the Budget Review document.

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