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SOUTH AFRICA: State reaps millions more through excise duty increase

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South Africa's state coffers could reap as much as R355m as a result of an increase of 8 to 10% in excise duties.

At the same time it was announced that traditional sorghum beer would not be affected by increases in excise and the levy imposed on soft drinks would be lifted. The latter action would result in the government losing R135m in revenue.

These "sin taxes", together with tobacco products, will generate R789m in taxes according to Finance Minister Trevor Manual.

Natural and fortified wine, beer and cider and alcoholic fruit beverage taxes have gone up 8%, while spirits have gone up 10%.

Manual said excise taxes had also lagged behind budget estimates, reflecting both slower than anticipated trends and shifts in household consumption away from excisable products in response to higher taxes.

By this admission he admits that previous taxes were already having a negative impact on the alcoholic beverage industry in South Africa.


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