A flat excise duty rate of R2.90 per millilitre for nicotine and non-nicotine vaping liquids (e-liquids) will be coming into effect from 1 June. This will see e-liquid prices inflate from 5.8% to 217%, depending on the volume and current retail price. “The tax will be detrimental to those using vaping to stop smoking as well as local small businesses – doing more harm than good,” says Kurt Yeo, cofounder of Vaping Saved My Life (VSML).
“At face value, the tax will move the consumer to the intended purpose of vaping less. But with many of those who vape having switched from smoking to this safer alternative and now having to pay far more for the privilege, they might be forced to revert to smoking as a cheaper option,” he points out. “Moreover, the excise overlooks that vaping is the most effective method for smoking cessation. So those who smoke and want to make the change will be dissuaded purely based on the price and will have to continue using the deadliest consumer product on the market, cigarettes.”
Yeo highlights that this tax increase will also mean that many vape shops and local manufacturers will be forced to shut down due to current and new customers being unable to afford locally produced products. “With the vaping industry contributing more than R2.49 billion to the country’s GDP, while also supporting 9,500 plus jobs, this will have knock-on effects not only on the livelihoods of employees and their families, but the South African economy too. More concerning is the likelihood of yet another illicit trade forming, circumnavigating all forms of control and standards.”
“This excise will impact the hundreds of thousands of South Africans who rely on these products, many more who could benefit from them, and an entire industry dominated by small businesses. I urge National Treasury and the South African Revenue Services to take the recommendations proposed by the Select Committee on Finance seriously, which call for further research and a socio-economic assessment study to be conducted on the excise. Failing to understand the South African vaping market and its potential to achieve lofty public health goals has the makings of yet another lost opportunity to do something useful,” he concludes.
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