South Africa taxes vaping before product regulations are passed: effective June 1

Today, June 6, reports indicate that South Africa has begun taxing e-cigarette products even before the laws to recognize and regulate them are passed. This tax took effect on June 1.

The tax applies to all e-liquids—whether bottled, pre-filled pods, or disposable devices—at a rate of 2.90 South African Rand (approximately $0.15) per milliliter. A 60-milliliter bottle of e-liquid will incur a tax of 174 Rand—around $9. This tax could potentially double the consumer prices of many e-cigarette products.

The wholesale tax is similar to what the country's Finance Minister proposed in the 2022 budget speech. It applies to all e-cigarette products, whether they contain nicotine or not.

According to Asanda Gcoyi, CEO of the Vapour Products Association of South Africa (VPASA), the domestic e-cigarette industry is expected to lose a quarter of its revenue and over 2,000 jobs. She told News 24 that many people will revert to smoking cigarettes, while others will seek cheaper e-cigarette products on the black market.

South African e-liquid manufacturers must apply for manufacturing and storage facility licenses from the South African Revenue Service (SARS) before the tax takes effect and must submit their first payment to the agency by July 28. Importers and wholesalers will be responsible for taxing imported e-cigarette products.

Meanwhile, the Tobacco Products and Electronic Nicotine Delivery Systems Control Bill, which has been in development since 2018, will add e-cigarette products to South Africa's existing tobacco control laws. Currently, there are no laws or regulations governing e-cigarette products in the country, not even a minimum purchase age law.

The bill is still being drafted in Parliament and is expected to classify cigarettes and e-cigarettes together, imposing smoking restrictions on e-cigarettes. It may also introduce new restrictions, such as a ban on online sales.

South Africa, with a population of over 60 million, is the second-largest economy in Africa (after Nigeria). According to the 2021 Global Adult Tobacco Survey, 25.8% of South Africans aged 15 and older smoke—this high rate is facilitated by the widespread availability of cheap black market cigarettes.