Times Of Swaziland: CIGARETTES, BOOZE TO COST MORE, NO FUEL LEVY IN SA

CIGARETTES, BOOZE TO COST MORE, NO FUEL LEVY IN SA
================================================================================
Ashmond Nzima on 24/02/2022 08:56:00


MBABANE – Smokers will pay an extra E1.03 for a packet of cigarettes.
In his televised budget speech yesterday, South Africa’s Finance Minister
Enoch Godongwana, announced that smokers and drinkers would have to pay extra on
‘sin’ taxes. Eswatini is an importer of most tobacco products and alcoholic
drinks, mainly ciders and wines. In his maiden speech broadcast on South
Africa’s main television stations that include eNCA, Minister Godongwana
announced that excise duties on alcohol and tobacco would increase by between
4.5 and 6.5 per cent. As a result, from yesterday, a 340ml can of beer or cider
would cost 11 cents more.
Expensive
A 750ml bottle of wine will be 17 cents more expensive. Sparkling wine drinkers
are also not off the hook, as they are paying an additional 76 cents. A bottle
of spirits will be E4.83 more expensive while a packet of cigarettes will cost
an additional E1.03.  Another hike saw 25 grams of piped tobacco costing an
extra 37 cents.  A 23 gram cigar will be E6.77 more expensive. Meanwhile, for
the first time since 1990, South Africa’s National Treasury decided not to
increase the fuel levy and Road Accident Fund (RAF) levy that contribute to the
hefty costs of petrol and diesel. Eswatini is a net importer of fuel products.
Data on imports for Eswatini in the past month, indicated that invoices for the
importation of energy products amounted to E350.4 million.
An increase in the levy would have been a double blow for Eswatini, as Minister
of Finance Neal Rijkenberg, in his budget speech last week announced an
additional 30 cents fuel tax that he intended to table with the Fuel Tax Bill.
“To provide some relief to households, no increases will be made to the
general fuel levy on petrol and diesel for 2022/23. This will provide a tax
relief of R3.5 billion to South Africans,” said Godongwana. Meanwhile, there
were some similarities in Ministers Neal and Godongwana’s speeches, and they
were headlined by a company or corporate tax cut.  The South African minister
who stepped into resigned Tito Mboweni’s shoes, said the corporate income tax
rate would in future reduce to 27 per cent from 28 per cent alongside ‘base
broadening measures’.
Minister Rijkenberg, on the other hand, said Eswatini was reducing corporate tax
from 27.5 to 25 per cent. There was also an almost similar relief in terms
taxes. While the beneficiaries were low earners here in Eswatini, middle income
earners in the neighbouring country will benefit from an adjustment in the
income tax brackets. This will see the annual tax free threshold for persons
under the age of 64 increasing to E91 250. Minister Rijkenberg lifted the tax
brackets, leaving more cash in people’s pockets earning less than E250 000 per
year. Individuals will now only start paying tax from E4 000 per month instead
of E3 500 per month. “Households and businesses are still under financial
pressure and are coping with higher obligations, the effects of COVID-19 and
increased fuel prices. Now is not the time to increase taxes and put the
recovery at risk. Accordingly, we have decided to keep money in the pockets of
South Africans,” Godongwana said.
Relief
South Africa’s budget also included E5.2 billion in tax relief, to help
support the economic recovery; provide some respite from fuel tax increases; and
boost incentives for youth employment. Notably, South Africa’s budget speech
was delivered after Eswatini’s for the first time in a long time. In reaction
to this development, Business Eswatini CEO Nathi Dlamini, said the Government of
Eswatini delivered a speech that is independent of South Africa and one which is
responsive to the country’s very own socio-economic situation as a country.
A local economist, on condition of anonymity, said his take from the South
African budget speech was the freeze in tax hikes; saying Eswatini needed to
review the proposal to increase tax for rich individuals. Minister Rijkenberg
announced a proposal to lift the upper tax bracket from 33 to 36 per cent. This
would affect those earning more than E300 000 per year.