Taxation of e-cigarettes in South Africa

Time： 2023-06-06

South Africa taxed e-liquid even before laws were passed to recognize and regulate vaping products. The tax went into effect on June 1. The tax, which applies ...

South Africa taxed e-liquid even before laws were passed to recognize and regulate vaping products. The tax went into effect on June 1.

The tax, which applies to all e-liquids—whether bottled, prefilled or single-use—is 2.90 South African rand (about $0.15) per milliliter. A 60ml bottle of e-liquid will be taxed at a rate of 174 rand -- about $9. The tax could double the consumer price of many vaping products.

The wholesale tax is essentially the same as proposed by the country's finance minister in his 2022 budget speech. It applies to all vaping products with or without nicotine.

The country’s domestic vaping industry is expected to lose a quarter of its revenue and more than 2,000 jobs, according to Asanda Gcoyi, CEO of the Vaping Products Association of South Africa (VPASA). Many people will return to cigarettes, and others will find cheaper vaping products on the black market, she told News 24.

South African e-liquid manufacturers must apply to the South African Revenue Service (SARS) for a manufacturing and storage facility license before the tax comes into effect, and must submit their first payment to the agency by July 28. Importers and wholesalers will be responsible for collecting taxes on imported vaping products.

Meanwhile, the Tobacco Products and Electronic Nicotine Delivery Systems Control Bill, which has been in the works since 2018, will add vaping products to South Africa's existing tobacco control laws. Currently, the country has no laws or regulations governing vaping products, or even a minimum purchase age.

The bill, still being drafted in parliament, is expected to group cigarettes and vaping together and impose smoking restrictions on vaping. It could also introduce new restrictions, such as a ban on online sales.

With over 60 million inhabitants, South Africa is the second largest economy in Africa (after Nigeria). According to the 2021 Global Adult Tobacco Survey, 25.8% of South Africans over the age of 15 smoke – a high rate made possible by the widespread availability of cheap black market cigarettes.

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