Budget 2026 | Vaping industry warns tax hike could undermine smoking reduction goals

South Africa’s vaping industry has warned that the 2026 excise tax increase could undermine efforts to reduce smoking, after Finance Minister Enoch Godongwana confirmed inflation-linked duty hikes on vapour products.

Godongwana tabled the 2026 Budget on Wednesday and confirmed that excise duties on tobacco, alcohol and related products would rise broadly in line with inflation. The adjustment is expected to result in modest increases in the retail prices of vape devices and e-liquids.

The increase forms part of government’s broader effort to maintain stable revenue without imposing sharp tax hikes amid rising living costs.

The Vapour Products Association of South Africa (VPASA), which represents manufacturers, wholesalers, and retailers of smoke‑free vapour products, said it would have preferred a zero per cent increase. The association maintains that vaping products contribute to tobacco harm reduction by encouraging adult smokers to switch from combustible cigarettes.

However, VPASA CEO Asanda Gcoyi, described the inflation-linked adjustment as a “measured step”.

The association also endorsed a recommendation by Parliament’s Standing and Select Committees on Finance for the National Treasury to publish a three-year excise roadmap for alcohol, tobacco and health-related levies.

According to VPASA, such a roadmap would provide greater regulatory certainty by outlining the projected trajectory of tax rates relative to inflation.

At the same time, the association called for a review of the Tobacco Products and Electronic Delivery Systems Control Bill, warning that in its current form it could undermine efforts to curb illicit trade.

VPASA argued that a coordinated, whole-of-government approach is needed to effectively combat the illicit market while ensuring responsible regulation of vapour products.

For the 2026/2027 financial year, excise duties on tobacco, alcohol and fuel will increase broadly in line with inflation.

Electronic nicotine and non-nicotine delivery systems will also face higher excise duties.
A pack of 20 cigarettes will rise from R22.81 to R23.58.
Pipe tobacco will increase by 28 cents per 25 grams, while cigarette tobacco will go up by 87 cents per 50 grams.
Cigars will increase by R4.56 per 23 grams.

Alcohol

A 340ml can of beer or cider will increase by 8 cents.
A 750ml bottle of wine will rise by 15 cents.
A 750ml bottle of spirits will increase by R3.20.

Fuel

The general fuel levy will increase by 9 cents per litre for petrol and 8 cents per litre for diesel.
The carbon fuel levy will rise by 5 cents per litre for petrol and 6 cents per litre for diesel.

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— National Treasury RSA (@Treasury_RSA) February 25, 2026

Written by: Realeboga Nke