According to BAT South Africa, the proposed South African excise tax on vaping products should be applied equally to all participants to ensure a level playing field and a level playing field for all participants. However, the company warned that prices will rise.

Tobacco giants represented by Dane Mouyis said in a speech to the Standing Committee on Finance that, according to Business Tech, according to its own data, e-cigarette products account for less than 0.5% of the entire nicotine product market in South Africa.

However, there are a plethora of retailers that are creating their own e-liquids.

Mouyis said many people make their own and import a few liters of nicotine liquid just to turn it into more small bottles of e-juice — a tax-free product.

The proposed average excise tax rate for e-cigarettes is R2.91 ($0.17) per milliliter, with a 70:30 ratio between nicotine and non-nicotine components, as proposed by the National Treasury.

To ensure that taxes are collected from the deal, Mou Yi said, in cooperation with Oxford Economics, it was found that the tax rate of R1.45/ml should be the absolute ceiling of the tariff.

The representative said that a tariff of 70 cents was more appropriate given South Africa's affordability.

Asanda Gcoyi of the South African Vapor Products Association, which represents manufacturers and retailers, warned that the tax would drive prices up for consumers, which could see the average price of vaping products rise by 138% and consumption of vaping oil to drop by 36%.

British American Tobacco stressed that aggressive excise taxes would push consumers to an illicit market that would subsequently grow. Gcoyi echoes this sentiment.

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

A GST registration system must be introduced for manufacturers and retailers - opening the market to the South African Revenue Service (SARS). Gcoyi added that the proposed tax is problematic because the rationale behind it is flawed.

The scientific basis for the tax is inaccurate, she said, because the national treasury believes the vaping industry is trying to undermine global tobacco efforts — while many international studies have actually pointed to vaping as a harm-reduction practice different from traditional smoking .

The target of the excise tax is unclear, she added, as the Treasury Department has provided few details on how it could benefit public health and studies on youth uptake have not drawn enough conclusions.

Imposing an excise tax would have significant unintended and irrational consequences, Gcoyi said, one of which is that the proposed tariffs would make e-cigarettes more expensive than smoking and create illicit trade — thus violating the principle of harm reduction.

The Vapor Products Association has since called on businesses to oppose the excise tax and called on the Treasury Department to conduct further market research on the impact of its proposal.

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