Proposed ‘vapour tax’ could more than double prices in South Africa

0
4

British American Tobacco South Africa says the proposed tax on vaping products should be imposed equally on all “actors” to ensure fair competition and a level playing field for all participants – prices would rise, however, it warned.

Speak on a standing committee for financethe tobacco giant represented by Dane Mouyis said that according to its own data, electronic vaping products make up less than 0.5% of South Africa’s entire nicotine product market.

However, there is an over-proportioned number of retailers creating their own vaping liquid.

Mouyis said many people are “doing it themselves” by importing a few liters of nicotine liquid to make many more vials of vape liquid – an excise product.

below The National Treasury proposalthe average excise duty rate for e-cigarettes is proposed at R2.91 per milliliter and distributed in a 70:30 ratio between nicotine and non-nicotine elements.

ALSO READ  South African universities are making a shift - but there's a catch

To ensure tax is levied on this trade, Mouyis said it had been agreed in conjunction with Oxford Economics that a rate of R1.45/ml should be the absolute upper limit of the tax.

The representative said that given South Africa’s affordability, a 70 cent tax would be more appropriate.

Asanda Gcoyi of the Vapor Products Association of South Africa, which represents both manufacturers and retailers, warned that the tax would push up price increases for consumers, the average price of vape products could rise by 138% and the consumption of e -liquid would fall by 36%.

British American Tobacco stressed that an aggressive excise tax would drive consumers away into an illegal market that would then grow. Gcoyi repeated this feeling.

The tobacco company proposed the following changes for vaping products in the country:

  • In order to open the market to the South African Revenue Service (SARS), a registration system with the excise duty for manufacturers and retailers must be introduced.
  • Make ml nicotine labeling on the outer packaging of the product mandatory. Vapes are currently measured by the number of puffs they offer, but must be tracked in terms of ml of nicotine.
  • Implement a track-and-trace system from day one with a unique identity code per individual product.
ALSO READ  Murder of German tourist: Action Society says murder is a reality stalking every person in SA

Gcoyi added that the proposed tax was problematic because the rationale behind it was flawed.

She said the scientific basis of the tax is imprecise in the sense that the National Treasury sees the vaping industry as an attempt to undermine global tobacco efforts — whereas many international studies have pointed out that vaping is a harm-reduction practice that bears no resemblance to traditional ones. to smoke.

ALSO READ  Retail sales fall 1.6 percent as shoppers cut spending - live updates

She added that the purpose of the excise tax is unclear, as the Treasury has provided few details about how it would benefit public health, and not enough research has been done on youth uptake.

The introduction of the excise tax will have significant unintended and irrational consequences, one of which is that the proposed tax would make vaping more expensive than smoking and create an illicit trade — and thereby violate the harm reduction doctrine, Gcoyi said.

The Vapor Products Association has since called on companies to oppose the excise tax and the Treasury to conduct further market research into the implications of its proposal.


Read: South Africa’s largest private sector employer just saw another growth spurt in this company