Experts Say Modest Sin Tax Hikes Won’t Ease Pressure on SA Healthcare System
- Health organisations say the latest sin tax increases on alcohol and tobacco are too small to reduce harmful consumption in South Africa
- The taxes, announced by Finance Minister Enoch Godongwana in the 2026 Budget, rise by about 3.4% in line with inflation
- Experts warn that stronger, above-inflation tax hikes are needed to help improve citizens' health, thereby easing pressure on the country’s strained healthcare system
Source: Getty Images
SOUTH AFRICA— Health advocacy groups say the latest increases in so-called sin taxes on alcohol and tobacco are not enough to reduce harmful consumption in South Africa, warning that the country’s already fragile healthcare system will continue to carry a heavy burden if stronger measures are not introduced.
Finance Minister Enoch Godongwana announced the increases during the 2026 Budget Speech, confirming that excise duties on alcohol and tobacco products would rise by 3.4%, broadly in line with inflation.
However, public health organisations and health experts say the small increases will do little to change behaviour or reduce the long-term health impacts associated with these products.
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Modest increases announced in the budget
Under the new adjustments, the tax on a 20-pack of cigarettes will rise from R22.81 to R23.58. Other tobacco products will also see smaller increases, including 28c more per 25g of pipe tobacco, 87c per 50g of cigarette tobacco, and R4.56 per 23g of cigars.
Alcohol products are also affected, although the increases are minimal. A 340ml can of beer or cider will increase by 8c, while a 750ml bottle of wine will rise by 15c. A 750ml bottle of spirits will see a R3.20 increase in excise duty.
Health advocates call for stronger measures
The Rural Health Advocacy Project says inflation-based increases will not meaningfully reduce alcohol and tobacco consumption.
Executive director Russell Rensburg said meaningful health taxes need to increase significantly above inflation to influence purchasing habits.
“Health taxes can only make a difference if they are significantly higher than inflation. The reality is that these increases are far from enough to make a difference,” he said.
Rensburg added that the fact that health taxes were highlighted in the Budget Speech signals that the National Treasury may still consider further reforms in the future.
WHO recommends above-inflation taxes
Groups such as the Health Tax Alliance have been calling for the government to raise taxes on alcohol, tobacco and sugary drinks above inflation levels.
The World Health Organisation has repeatedly recommended this approach, saying higher taxes on harmful products are among the most effective tools governments have to reduce consumption, lower disease rates and generate additional public revenue.
Public health experts say excessive alcohol and tobacco use contribute to a wide range of illnesses, including cancer, heart disease and liver damage, which place significant strain on South Africa’s healthcare system.
Health practitioner comments on six tax, alchohol and tobacco use
Briefly News also spoke to Dr Raessa Molla, a general practitioner, who said that for taxes to influence consumption, they usually need to raise prices enough for people to reconsider how much they drink or smoke.
“Doctors see the consequences of alcohol and tobacco every day in our consulting rooms and emergency units. Any policy that reduces consumption can help, but modest increases are unlikely to significantly reduce the number of patients suffering from related illnesses,” she said.
Speaking about the dangers of alcohol and smoking, she added,
“Many people associate smoking mainly with lung cancer, but it also contributes to heart attacks, circulation problems, fertility issues and complications during pregnancy. Excessive alcohol consumption can also cause serious damage to the liver, including fatty liver disease, hepatitis and cirrhosis.”
Regarding the resulting burden on the healthcare system, she said,
“A large proportion of hospital admissions are linked in some way to alcohol or tobacco use, whether through chronic disease, trauma or complications.”
Concerns about illicit trade
In a related article, government officials have also warned that steep tax increases could unintentionally fuel the illicit alcohol and tobacco market.
Outgoing South African Revenue Service commissioner Edward Kieswetter recently cautioned that tax policy must be balanced with strong enforcement capacity to prevent illegal trade from expanding.
Despite these concerns, health advocates maintain that stronger sin taxes remain one of the most effective tools available to reduce harmful consumption and help protect public health.
Source: Getty Images
Articles on the 2026 budget
- Briefly News previously reported that Finance Minister Enoch Godongwana’s Budget Speech has left questions about how the average citizen is affected. Professor Elda Du Toit of the University of Pretoria shared her view on how the budget affects South Africans, both positively and negatively.
- The EFF welcomed the adjustment of personal income tax brackets. However, the party rejected the full speech and called it a fictional budget that relied on different creative accounting methods to achieve a meaningless fiscal anchor.
- During his speech, the Minister of Finance stated that the Border Management Authority (BMA) would be allocated an additional R990 million. This increase is aimed at strengthening border management, improving enforcement and addressing illegal immigration.
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Source: Briefly News
