Finance Minister Enoch Godongwana on Wednesday announced fresh tax adjustments to raise revenue and reduce the budget deficit.
Alcohol and tobacco taxes, collectively known as ‘sin taxes’, were hit with above inflation increases in the last two budgets.
In the third and likely final, budget for the year, Godongwana maintained those increases, proposing a 6.8% hike for alcohol and 4.8% for tobacco products.
However, the sugar tax was left unchanged for 2025.
While not regarded as a sin tax per se – rather put under the “health promotion levy” – the sugar tax was introduced in 2018 specifically to cut back sugar content in South African food products.
It is also a key ingredient in many alcoholic beverages, and contributes to the price structure.
Alcohol and tobacco (‘Sin taxes’)
These increases are above inflation, with alcohol facing a real increase of 2.67% and tobacco 0.67%, based on projected 2025 inflation of 4.08%.
Expected revenue boost from sin taxes:
Alcohol
Tobacco products
Sugar Tax (Health Promotion Levy)
Fuel Levy Increases (Effective 4 June 2025)
Background: Budget pressures
Overall, are you happy – or upset – at the Budget?
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