The price of nicotine and nicotine-substitute solutions in vaping products is expected to skyrocket as a new sin tax targeting smokers using them takes effect from Thursday.
These products will now be included in the tax net with a flat excise duty rate of R2.90/ml from June 1, according to the SA Revenue Service.
Though it is unclear how much of the hike will be passed on to consumers, industry stakeholders warned it could push up the price of some e-liquids by as much as 217%.
The tax is being rolled out ahead of the Tobacco Products and Electronic Delivery Systems Control Bill, approved by cabinet in October, which is set to regulate the sale and advertising of tobacco products and electronic delivery systems.
It aims to prohibit the sale of tobacco products and e-cigarettes to children and ban free distribution, including the sale of tobacco products or e-cigarettes through vending machines. It will also regulate the use of flavours in e-cigarettes.
E-cigarettes have become a public health concern in SA, particularly among young people who, some experts argue, would not have otherwise picked up a nicotine addiction, reported TimesLIVE Premium on Wednesday.
Australia last month banned recreational vaping and tightened e-cigarette laws to try to halt an alarming rise in teenage vaping. “This is a product targeted at our children, sold alongside lollies and chocolate bars,” said Australia's health minister Mark Butler. “Vaping has now become the number one behavioural issue in high schools. And it's becoming widespread in primary schools as well,” he was quoted as saying by Reuters.
Vapour Products Association of SA (Vpasa) CEO Asanda Gcoyi previously told Business Day that the imposition of the excise tax would devastate the industry.
Industry stakeholders maintain vaping is a safer alternative to smoking cigarettes.
Vpasa has also cautioned that the government's approach to regulating the industry may inadvertently backfire, driving consumers into the arms of illicit (and cheaper) cigarette alternatives.
“As we saw during the Covid-19 lockdowns, the banning of the sale of alcohol and tobacco products failed to stop consumers from accessing these products. Instead, the ban created further opportunities for the illicit market to thrive. As things stand, the South African tobacco market is now dominated by the illicit tobacco cigarettes, which has seen government lose revenue, impact jobs in the tobacco supply chain, and ultimately, increased the burden on public health systems,” said the association in January.
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