AHRA’s response to South African Treasury’s proposed taxation of electronic nicotine delivery systems (ENDS)

ENDS should be clearly separated from cigarettes, as they are not tobacco products. No tax, or at the most clearly risk-differentiated taxes should be levied on ENDS.

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), in line with other nations such as Kenya. It proposed that a 40 per cent incidence guideline be used, which translates to “a total excise duty ranging from as low as R33,30 to R346,00 with an average of R165,29. With this approach, the excise rate may be set at an average of R2,91 per millilitre apportioned on nicotine and non-nicotine elements of the solution based on a ratio of 70:30, respectively. This will imply a rate of R2,03 per milligram of nicotine and 87 cents per millilitre for the liquid”.

The founders of AHRA, Dr Delon Human and Dr Kgosi Letlape, are both regularly concerned in their professional lives with combatting the tremendous burden of disease and mortality borne by South African citizens due to combustible tobacco products. With this experience, and based on the strong evidence coming from the biological, medical, and behavioural sciences, they wrote a detailed and referenced response to the South African treasury concerning their proposed excise duty on ENDS.

In the letter, they state unequivocally that any risk-undifferentiated tax (including an excise tax) on Electronic Nicotine Delivery Systems (ENDS) would:

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. The evidence is already compelling that ENDS can reduce harm in individual and population health, in South Africa and elsewhere.”

Read their full response.