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Customs and Excise Duties

The following changes to the current customs and excise legislation were proposed in the 2013 Budget:

Specific Excise Duties (“sin taxes”)

The annual changes to the sin taxes were expected, with an increase in the rates of excise duties payable on tobacco products and alcoholic beverages in line with a targeted total tax burden (excise duties plus VAT) of 23, 35, 48 and 52 percent of the average retail price for wine, clear beer, spirits and tobacco, respectively. 

The excise duty on malt beer increases by 7.5% from R59.36 to R63.81 per litre of absolute alcohol, which equates to an average increase of 7.50c per 340ml can, to a total of 108.48c per 340ml can.

For the eighth year, we see no changes to the excise duty on traditional beer and traditional beer powder, which remain at 7.82c per litre and 34.7c per kg respectively.

Wine incurred increases in excise duty of 8.0% unfortified, 5.7% fortified and 10.0% sparkling. This has resulted in the rates per litre on these products equalling R2.70, R4.85 and R8.28 per litre, respectively.

Ciders and alcoholic fruit beverages received an increase in excise duty of 7.4% per litre, which equates to an average increase of 7.50c per 340ml can, to a total of 108.48c per 340ml can.

Spirits see an increase of 10.0%from R111.64 to R122.80 per litre of absolute alcohol, which equates to an average increase of R3.60 per 750ml bottle to a total of R39.60 per 750ml bottle.

Smokers will also face increased prices as a result of increases in the excise duties on cigarettes (5.8%), cigarette tobacco (10.0%), pipe tobacco (9.9%) and cigars (7.0%).

The excise duty amendments on the above are effective from 27 February 2013.

Fuel Taxes

The general fuel levy is to be increased by 22.5c per litre. The net increase in the general fuel levy will however only be 15c per litre as the multiproduct pipeline levy of 7.5c per litre, which has been part of the fuel levy since April 2010, will end on 2 April 2013.

The Road Accident Fund (“RAF”) levy will increase by 8.0c per litre.  

The above proposals will become effective from 3 April 2013.

Advalorem Excise Duties

It is proposed that video recorders of item 124.55.01, with eight or more input channels and a value for duty purposes exceeding R13 000, be exempted from ad valorem excise duties with effect from 1 April 2013.

This exemption is expected to only apply to industrial type recorders due to the vast differences in value between household and industrial type recorders.

Excise duties on fruit fermented beverages

The structure of tariff heading 22.06 has been amended to align the excise duty provisions for fruit beverages with the requirements of the Liquor Products Act (1989). As a result, only products predominantly fruit fermented will be distinctly classified in this beverage category.

Fermented products not mainly derived from fruit will be included in the band for beverages with an alcoholic strength below 2.5% or in the generic “other” band. 

The one band uses the highest excise rate (the full spirits rate). The other band will only be increased to the highest spirits rate in Budget 2014 to allow current manufactures time to comply with the requirements for fruit fermentation.

General Customs and Excise matters

  • Plastic bag and incandescent light bulb levy: The plastic bag levy will increase to 6c/bag and the levy on incandescent light bulbs will increase to R4 per bulb effective 1 April 2013.
  • Biofuels production incentive:An infant industry support incentive, based on benchmark costs of hypothetical world-scale plants in South Africa, is proposed to compensate for monthly movements in benchmark feedstock and output prices. The initial cost of the incentive will be 3.5c/l to 4c/l of petrol or diesel (included in the monthly price determination) and will be phased out over an assumed 20 year lifetime of a benchmark plant.
  • Streamlining of registration processes for businesses: A single registration process for all tax types and customs will be launched to simplify all business registrations.
  • Vehicle carbon emissions tax: With effect from 1 April 2013, the carbon emissions tax for passenger vehicles will increase from R75 to R90 for every gram of emissions per kilometre above 120gCO2/km and in double cabs, from R100 to R125 for every gram of emissions per kilometre above 175gCO2/km.
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