ENDS to be taxed at 75% combustibles rate in South Africa

The South African Treasury’s tax on ENDS at 25% less than combustible tobacco over the past two years gives a small nod to harm reduction

In December 2021, the South African government’s Treasury released a discussion paper for open consultation entitled ‘Taxation of electronic nicotine and non-nicotine delivery systems‘. This paper proposed a plan to implement a specific excise tax on Electronic Nicotine Delivery Systems (ENDS) and Electronic Non-Nicotine Delivery Systems (ENNDS). AHRA’s founders, Dr Kgosi Letlape and Dr Delon Human, wrote a detailed and referenced response to the South African treasury concerning their proposed excise duty on ENDS. They stated unequivocally that any risk-undifferentiated tax on ENDS w0uld:

1. Seriously harm South African public health
2. Create far more expenses for the government and South African citizens than any possible tax could offset
3. Be wholly unethical

In their concluding remarks, they stated: “As public health and medical leaders we strongly encourage the National Treasury to refrain from taxing vaping products, or at the most, clearly differentiate tax categories, based on risk to individual and population health.”

Recently, SA Treasury’s Chief Director for Economic Tax Analysis, Chris Axelson was interviewed by veteran healthcare journalist Chris Bateman. Axelson said that a flat tax rate on electronic nicotine delivery systems (ENDS) – based on the amount of liquid they contain – will be introduced in South Africa. This tax rate will be 25% lower than for combustible tobacco, irrespective of the e-liquid’s nicotine content and concentration. Bateman also asked Axelson about the regulation of snus, which has almost totally displaced cigarettes in Sweden and Norway, rendering their rates of tobacco-related disease and death lower than any other European nation. However, Axelson was unaware of any immediate plans to tax this harm-reduction product: “We’ll have to check the scope before we do the legislation”.

Dr Kgosi Letlape, AHRA’s President, was also interviewed by Chris Bateman; he stated his views clearly: “The tax needs to make [ENDS] products accessible & affordable. At present, they’re on average priced the same as cigarettes, which does very few people any good.” Whilst he praised the 25% lower tax than combustible tobacco as “better than nothing”, he said “it’s still too high”. Additionally, he lamented the blind groupthink approach of the National Department of Health in following the World Health Organisation’s outdated prohibitionism of harm-reduction alternatives to smoking.

Read the full interview with Chris Bateman.