National Treasury responds to comments by REEP on taxation of tobacco and alcohol products

In September 2023 we made a submission to Parliament’s Standing Committee on Finance, where we called on National Treasury to increase the excise tax on tobacco and alcohol, and to introduce a multi-year taxation approach. We also urged the government to ratify the Protocol to Eliminate Illicit Trade in Tobacco Products, given that illicit trade was so rampant in South Africa.

National Treasury gets appeals from a variety of interest groups, including the alcohol and tobacco industries. At the September 2023 meeting, the alcohol and tobacco industries appealed to National Treasury to treat them more leniently with respect to the excise tax increases.

On 25 October 2023, National Treasury responded to the submissions made in September 2023. Unfortunately, National Treasury “noted” most of our recommendations, and did not commit to implement them. However, National Treasury did not accept the industry’s argument that illicit trade is related to the increase in the excise tax, but rather the result of criminal activity. REEP has consistently shown that illicit trade is not linked to excise taxes.
 
National Treasury’s responses to the various submissions can be found at: www.treasury.gov.za/comm_media (see pages 21-28).
 
Sometimes, in the policy space, not moving backwards can be regarded as progress. The alcohol and tobacco industries will continue to push for policies that are in their interests and against the interests of public health. In the absence of a counter-voice, industry voices can influence government officials to move backwards.
 
However, stasis is not good for health policy. We want tobacco and alcohol policies to be tightened, with the ultimate aim of improving public health.