# Cigarette and alcohol taxes go up even though you can’t legally buy them

- Link: https://dearsouthafrica.co.za/2020/08/11/cigarette-and-alcohol-taxes-go-up-even-though-you-cant-legally-buy-them/
- Published: 2020-08-11T07:03:03+02:00
- Author: dearSA

### One of the ironies of the times in which we live is that taxes on cigarettes and alcohol are to go up – even though there isn’t a hope in hell of government collecting any of this while there is a ban on cigarette and alcohol sales.

![tax-law-amendments-DearSA](https://cdn.dearsouthafrica.co.za/wp-content/uploads/
2020/08/20191000/tax-law-amendments-DearSA.jpg "tax-law-amendments-DearSA")

Proposed changes to tax laws have just been announced, making good on finance minister
Tito Mboweni’s 2020 Budget promise to raise “sin” taxes on cigarettes and alcohol.

**In his February Budget speech, Mboweni said a 340ml can of beer or cider would
increase by 8c, and a 750ml bottle of wine would increase by 14c.**

Excise on a box of **20 cigarettes would go up an extra 74c.** Last week, government
tabled the proposed changes to tax laws and rates, and invited public comment. _Now
might be a good time to make your voice heard._

[ Have your say on this amendment](https://dearsouthafrica.co.za/tlab/)

Mboweni may not have known in February that a lockdown was coming and the tax collection
projections he was banking on from cigarettes (and alcohol) would go up in smoke.

Then came the lockdown. Despite the ban on cigarette sales, 90% of smokers continuing
to get their daily fix from their “dealers”. An estimated 11 million South African
smokers have been criminalised, and Tax Justice SA (TJSA) estimates the loss to 
the fiscus of R5 billion so far. The loss is running at R35 million a day.

“The 132-day-old ban is causing untold misery for millions, robbing the fiscus of
R35 million daily and destroying thousands of jobs,” says TJSA founder Yusuf Abramjee,
after hearing court evidence led by cigarette manufacturer BAT against the government
ban.

“Anyone who had to sit through two days of repetition, rambling and long-winded 
explanation by Minister Dlamini-Zuma’s lawyers will know how weak her case is,” 
says Abramjee. “Sadly for the three judges, they have a duty to consider the huge
volumes of paperwork with which the Minister has tried to overwhelm them.

“But the President should not wait for their verdict, as patently the ban is so 
wrong and is doing so much harm. He should do the right thing and lift this failed
prohibition immediately.

President Cyril Ramaphosa has promised to crack down on officials who break the 
law to profit from the pandemic after stories started emerging of politically-connected
individuals scoring massive Covid-related supply contracts. Meanwhile, rumours abound
of politically-connected suspects raking in profits from illegal cigarette sales.

Whether true or not, the tobacco industry in SA has been gutted, taken over by black
market operators. SA Revenue Services (Sars) had spent the last decade trying to
clean up the tax-dodging in this sector. It’s been set back at least a decade by
the ban. The black market operators will not easily be dislodged, even when the 
ban is eventually lifted.