The South African government announced yesterday it will propose a new tax on vaping products that will take effect next year. The government stated its intention to tax e-liquid last year, issuing a discussion paper in December, and accepting public comment for several weeks.
The new tax proposal was outlined yesterday by South African finance minister Enoch Godongwana as part of a package of new and increased excise taxes on tobacco, alcohol and high-sugar products. The vaping tax will be included in the 2022 Taxation Laws Amendment Bill, and could be changed by Parliament before being finalized. The finance minister says it will be in place by Jan. 1, 2023.
The proposed tax rate would be “at least” 2.90 rand (about 18.9 U.S. cents) per milliliter, according to Godongwana. The proposed amount would add more than $11 to the price of a 60 mL bottle of e-liquid, or almost $19 to a 100 mL bottle. It would apply to all e-liquid, with or without nicotine.
The proposed tax would essentially double the price of retail e-liquid—in a country where some cigarette brands sell for as little as R10-18 ($0.65-1.17) a pack. Adult smoking prevalence in South Africa was 17.6 percent in 2015, but smoking rates in low-income areas are much higher.
The R2.90/mL tax rate is almost exactly the figure suggested in one of the three tax options outlined in the government’s discussion paper. The rate is supposedly equivalent to 40 percent of the retail price of the most popular brand.
South Africa’s population is about 60 million. It has the second-largest economy in Africa (after Nigeria). The country currently has no specific rules on vaping products, but is working on a proposal to regulate vaping under its tobacco laws.
Smokers created vaping without any help from the tobacco industry or anti-smoking crusaders, and vapers have the right to keep innovating to help themselves. My goal is to provide clear, honest information about the challenges vaping faces from lawmakers, regulators, and brokers of disinformation. I recently joined the CASAA board, but my opinions aren’t necessarily CASAA’s, and vice versa. You can find me on Twitter @whycherrywhy