New vaping rules and taxes planned for…


The Nationwide Treasury has revealed a dialogue paper outlining a proposal on the taxation of digital nicotine and non-nicotine supply programs (ENDS).

This follows indicators from the federal government in its earlier two price range speeches that it plans to begin taxing these two merchandise.

“ENDS are part of new generation products that have been introduced in the market either as harm reduction or reduced-risk products compared to traditional tobacco products,” the Nationwide Treasury mentioned.

“These products are battery-powered devices that vaporise liquid solutions that may contain nicotine, as well as varying compositions of flavourings, propylene glycol, vegetable glycerin, and other ingredients, to create an aerosol which the user inhales.”

Treasury mentioned that whereas the marketplace for ENDS remains to be at its infancy in lots of creating international locations like South Africa, it’s anticipated to develop. In different markets, the expansion within the consumption of those merchandise has been noticed among the many youth and has raised considerations on its impression on youth initiation of smoking and tobacco use, it mentioned.

It added that there are considerations relating to their potential to undermine world tobacco management efforts, and public well being generally.

“Unlike conventional tobacco products, these products are mostly unregulated in South Africa, hence the Department of Health has also started a process of amending the current tobacco control legislation to include these products in the regulatory framework.

“Similarly, other governments around the world have started a process of regulating the consumption and use of ENDS through tax and non-tax measures.”

Whereas the proposal doc is open for remark till 25 January 2022, Treasury has indicated {that a} tax might be launched on each the machine and the oil used inside it. This might enable for merchandise with the next nicotine focus to hold the next tax – in keeping with different excessive nicotine merchandise reminiscent of cigarettes.

A research commissioned by the Vapour Merchandise Affiliation of SA (VPASA) in 2021 regarded into the financial impression the business has domestically, together with its contribution to GDP and employment.

NKC African Economics’ Cobus de Hart who led the research, mentioned his staff used information on procurement, tax, human sources and funds from a survey of vapour business individuals in South Africa.

“The vapour products industry supports GDP and jobs throughout its supply chain. Its total gross value-added contribution to GDP is R2.49 billion, with R710 million in tax payments made in 2019.”

Key findings of the Financial Affect of the Vaping Business in South Africa report embody:

Direct financial impression:

  • Greater than 350,000 South Africans use vapour merchandise;
  • Vapour product gross sales in 2019 amounted to R1.25 billion;
  • The business generated 3,800 jobs;
  • R280 million was paid in taxes;
  • Gross value-added contribution from the vapour business amounted to R930 million.

Oblique financial impression:

  • R290 million in native procurement;
  • 40% and 31% spent with monetary and enterprise companies and manufacturing, respectively;
  • Supported 4,200 jobs;
  • Not directly contributed R1.09 billion to SA’s GDP.

Vaping merchandise are at the moment not regulated in South Africa. Particularly, e-cigarettes are usually not lined by the Tobacco Merchandise Management Act or the Medicines Act. The federal government has proposed the Management of Tobacco Merchandise and Digital Nicotine Supply Methods Invoice through which it hopes to manage vapour merchandise in the same method as cigarettes.

The invoice was launched for public remark in 2018, however is at the moment nonetheless in a draft type. It stills must endure a full parliamentary course of earlier than being launched.

The invoice is predicted to additional regulate the use, advertising and marketing and gross sales of e-cigarettes or vapes in South Africa, with these merchandise at the moment working in a legislative vacuum.

Plans are additionally in place to introduce additional restrictions on the smoking of cigarettes in public locations.

You possibly can learn the total proposal doc beneath and particulars on commenting beneath.

Learn: Concentrate on stage 1 lockdown guidelines on social gatherings

New vaping guidelines and taxes deliberate for South Africa

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