In South Africa, the new tax on e-cigarettes and heated tobacco has received mixed reception.

Since the 1^er Starting in June 2023, a new tax of 2.90 rand per milliliter is to apply to both e-liquids and heated tobacco products. The vaping industry considers this tax too onerous, while an economic research institute considers it to be grossly insufficient.

The cost of a bottle of e-liquid has doubled in South Africa since 1^er June 2023. The new tax, which led to an increase of 2.90 rand/ml (or 0.14 euros) of e-liquid, thus brings the price of a 100 ml bottle to 490 rand instead of 200 rand currently[1]Heated tobacco products, which were previously also not taxed, will also be subject to this tax.

Overvalued taxation according to manufacturers

The vaping industry, united under the banner of the Vapour Products Association South Africa (VPASA), had expected a price increase, but consider that it is all the more disproportionate as it is a new tax.[2]Asanda Gcoyi, VPASA's director general, estimates that this tax should lead to a 26% drop in e-cigarette sales, with a knock-on effect on smoked tobacco, and that it could lead to the loss of 2,250 jobs.

A tax that needs to be strengthened according to civil society

Researchers at the Research Unit on the Economics of Excisable Products (REEP), on the other hand, believe that this tax is insufficient to curb vaping, which has been growing rapidly for several years. They believe that an increase of 5 rand/ml of e-liquid would be preferable, and would like to see a tax of 50 rand (2.40 euros) applied to the sale of vaping devices, whether or not they deliver nicotine. The consequences in terms of reduced sales and employment, as suggested by manufacturers, seem highly exaggerated.

In support of this argument, Kirsten Van Zee, a researcher at REEP, points out that this new tax would only increase excise duties to 8.4 % of the total price of e-cigarettes, whereas tobacco products in this country are taxed at 40 %.[3]. She also denounces e-cigarettes as a gateway to smoking and not as an aid to quitting, which would further justify heavy taxation. Since the toxicity of e-cigarettes has not yet been firmly established, she recommends applying the precautionary principle to them while awaiting new data. This new tax had, however, been announced since the beginning of 2023, with the adoption by the South African parliament of the law on the control of tobacco products and electronic delivery systems, and its implementation had already been delayed by six months.

Keywords: South Africa, vaping, excise duties, taxes.

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[1] Brederode W, Surge in vape juice prices coming as new sin tax is introduced next month, News24, published May 13, 2023, accessed June 7, 2023.

[2] New smoking tax hitting South Africa tomorrow, BusinessTech, published May 31, 2023, accessed June 7, 2023.

[3] The World Health Organization recommends raising excise duties on tobacco products to 75 %.