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Tax Gap of Heated Tobacco Products in South Africa

Until 2019, novel tobacco products (e.g., heated tobacco, electronic cigarettes) were not subject to excise taxation. In February 2020, the Ministry of Finance announced, with the release of the National Budget for 2020, that a new tax rate equal to 75% of the tax rate on cigarettes would be applied to heated tobacco, effective April 1, 2020 (FY 2020/21). A pure specific excise tax based on the number of sticks is applied to heated tobacco, at the rate of 75% of the cigarette excise rate. As a result, since April 1, 2020, the excise rate for heated tobacco is ZAR 13.05 per 20 sticks.

South Africa applies a specific excise tax on cigarettes. Since April 1, 2020, the specific excise tax rate is ZAR 17.4 per 20 sticks.  

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Last Updated Mar. 1, 2021