Local consumers will soon feel the impact of South Africa’s latest tax hikes, as the cost of cigarettes and alcohol is set to increase from March.
The adjustments follow South Africa’s 2026 Budget Speech delivered by Finance Minister Enoch Godongwana yesterday, where he announced inflation-linked increases to excise duties on tobacco and alcoholic beverages.
Given that the country’s heavy reliance on imports from South Africa and the one-on-one peg between the lilangeni and the rand, the new ‘sin tax’ measures will translate directly into higher prices in local shops.
This therefore means that local retailers would be expected to adjust their pricing in line with these changes almost immediately, given the direct import pipeline from South Africa.
An economist has warned that while the increases may appear modest per unit, they would add up significantly for regular smokers and drinkers.
The South African government has defended the hikes as necessary to raise revenue and curb excessive consumption.
For the kingdom, however, the ripple effect was largely economic, with households set to spend more on products that are already considered non-essential luxuries.
Industry observers noted that the adjustments could also push some consumers towards cheaper alternatives or reduce overall consumption, echoing Pretoria’s stated public health objectives.
“Madam speaker, increases to certain taxes are unavoidable. For 2026/27, excise duties on tobacco will be increased in line with inflation. This includes excise duty on electronic nicotine and non-nicotine delivery systems,” Minister Godongwana said yesterday.
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Meanwhile, Minister Godongwana said the global economy was projected to grow by 3.3% in 2026, in line with last year’s outcome.
Advanced economies were expected to grow moderately, while emerging markets will continue to anchor global momentum.
India and sub-Saharan Africa in particular, were forecast to grow more strongly, supported by resilient domestic demand.
These developments were unfolding within an unprecedented global trade environment characterised by persistent geopolitical tensions and shifting trade policies which are reshaping supply chains.
In response, there will be a need to diversify trading portfolios, secure new markets, reduce vulnerability to external shocks and position ourselves to benefit from emerging global growth centers.
“On the domestic front, our growth outlook is steadily improving. We project real economic growth of 1.6% in 2026, an improvement from the 1.4% estimated in 2025. This improvement reflects the continued strengthening of economic performance from the second half of 2025.
‘‘Over the medium term, growth is expected to average 1.8%, reaching 2% by 2028. Persistent logistics bottlenecks, weak public infrastructure and the recent outbreak of foot and mouth disease continue to weigh on economic activity and pose risks to the outlook. In light of this, rapid inclusive growth remains our only durable path forward,” the minister said yesterday.
THE PRICES ACCORDING TO MINISTER GODONGWANE:
Tobacco products
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A 20-pack of cigarettes will rise from R22.81 to R23.58.
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Pipe tobacco will increase by 28 cents per 25 grams.
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Cigarette tobacco will go up by 87 cents per 50 grams.
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Cigars will climb by R4.56 per 23 grams.
Alcoholic beverages
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A 340ml can of beer or cider increases by 8 cents.
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A 750ml bottle of wine rises by 15 cents.
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A 750ml bottle of spirits jumps by R3.20.
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