Nicotine-substitute solutions, including vaping products, will be included in the tax net with a excise duty rate of R2.90/ml from 1 June. Image: Pexels
South Africa eyes new regulations, taxes for vaping products
South Africa’s National Treasury has released its proposed outline for new laws seeking to tax vaping products.
Nicotine-substitute solutions, including vaping products, will be included in the tax net with a excise duty rate of R2.90/ml from 1 June. Image: Pexels
South Africans who enjoy vaping may be in for some bad news. Certainly, National Treasury has published its outline of a proposal seeking to implement taxation on electronic nicotine and non-nicotine delivery systems (ENDS). This comes after the government mentioned possible taxes for these products in two budget speeches.
It appears that this has become a reality with National Treasury commenting in the discussion paper that:
“ENDS are part of new generation products that have been introduced in the market either as harm reduction or reduced-risk products compared to traditional tobacco products. These products are battery-powered devices that vaporise liquid solutions that may contain nicotine, as well as varying compositions of flavourings, propylene glycol, vegetable glycerin, and other ingredients, to create an aerosol which the user inhales.”
National Treasury
Vaping market in SA still at its ‘infancy’
Interestingly, Treasury explained that the market for vaping products in South Africa is still in its infancy with expectations that it is set to grow.
In line with this, Treasury explained that a growth in the consumption of these products among the youth is a cause for concern. Additionally, Treasury says that concerns have been raised that these products have the potential to undermine public health.
“Unlike conventional tobacco products, these products are mostly unregulated in South Africa, hence the Department of Health has also started a process of amending the current tobacco control legislation to include these products in the regulatory framework. Similarly, other governments around the world have started a process of regulating the consumption and use of ENDS through tax and non-tax measures.”
National Treasury
South Africans can expect tax on devices and oils
The proposal document saw Treasury indicating that both the device and oils used within it would be taxed. Essentially, this would allow for a higher tax on products with higher nicotine concentration.
A study carried out by the Vapour Products Association found that the total contribution to the nation’s GDP for these products is R2.49 billion with R710 million in tax payments made in 2019.
The proposed outline is open for public comment until later in January. However, it remains in draft form and will still need to undergo a full parliamentary process before being introduced.
