Alcohol and tobacco taxes to rise with inflation: What it means for consumers

Cape Town-160224-Minister of Finance, Pravin Gordhan’s budget speach has implimeAlcohol producers have welcomed the decision to limit sin tax increases to inflation, saying predictable adjustments are critical for industry stability and efforts to curb illicit trade. Alcohol producers have welcomed the decision to limit sin tax increases to inflation, saying predictable adjustments are critical for industry stability and efforts to curb illicit trade. Finance Minister Enoch Godongwana said increases in so-called “sin taxes” were unavoidable despite an improved revenue outlook.

As a result, the tax on tobacco products will rise in line with inflation in 2026/27, including taxes on electronic nicotine and non-nicotine delivery systems, Godongwana announced. Excise duties on alcoholic beverages will also increase at inflationary levels. Heineken Beverages said the minister’s approach reflected consideration of economic pressures and the rapid growth of illegal alcohol sales.

Maroga said keeping excise adjustments predictable helps narrow the price gap between legal and illicit products, strengthening enforcement and compliance efforts. Heineken also welcomed the announcement of the National Illicit Economy Disruption Programme, saying the company looks forward to partnering with the government. Industry concerns about illicit trade have intensified in recent years.