The new excise duty imposed on vaping products as of 1 June 2023 has already started to have a devastating effect on vape retailers, and some warn that the tax will only cause more harm than good. The flat excise duty rate for e-cigarettes is R2.90 per millilitre, and manufacturers were required to apply for licenses for their manufacturing premises specifically for these products from SARS before 1 June. Opponents argue that the tax will have adverse effects, such as driving consumers towards illicit markets, and that implementing the tax is premature since legislation governing vaping products in the country has not yet been officially enacted. Vaperite managing director Barry Buchman argued that the tax goes against the NT’s health claims and will only exacerbate the so-called “vaping epidemic” while killing many businesses. Health concernsAccording to Buchman, the tax will only push cashed-strapped vaping consumers to purchase the highest and most addictive nicotine-content e-liquid, as it would be cheaper.
The introduction of a tax on e-liquid prices in South Africa has devastated vape retailers, with a retail chain with 15 retail outlets closing all 15 locations on 31 May and a few e-liquid manufacturers also closing. This has caused low nicotine level e-liquid to be prohibitively expensive, and current users of vape products to start transitioning over to higher strength and more addictive nicotine salt e-liquid to get the same fix at a far lower cost. This tax will also make it easier for underage users of vape products to buy them from illicit retailers. In contrast, current retailers have a self-implemented no-under-18 age limit on vape sales. Consumers may not have to take the full brunt of the price increase as the industry looks at initiatives to soften consumer impact. However, the tax has already started to have a devastating effect on vape retailers, with a retail chain with 15 retail outlets closing all 15 retail locations on 31 May and a few e-liquid manufacturers also closing.
The company expects up to 50% of current retailers and possibly a higher number of e-liquid manufacturers to be out of business by the end of this year. The black market will pick up the slack, and e-liquid of questionable quality and source will be readily available to anyone visiting flea markets and private channels. The main driver of the tax was the primary concern over the use of vape products by the youth, the so-called “vaping epidemic”. Vaperite would welcome working with NT and the Department of Health to explore their ideas for a youth-free e-liquid market in South Africa and would even be willing to create a public/private partnership to implement and monitor the system.
