Budget 2022 | Fuel and RAF levies unchanged but booze & cigarette prices hiked

For the first time since 1990 the general fuel levy and RAF levy will remain unchanged for the next financial year.
Image: jarun/123rf

The National Treasury has resolved not to hike the general fuel levy and the Road Accident Fund levy for the first time in 31 years to cushion hard-pressed consumers from soaring petrol prices.

This was announced by finance minister Enoch Godongwana in parliament on Wednesday as he tabled his 2022/2023 budget.

The price of fuel went up to more than R20 per litre in December due to higher crude oil prices and the weaker rand.

“To support motorists and the economic recovery, no increases will be made to the general fuel levy on petrol and diesel for 2022/2023, providing tax relief of R3.5bn. There will be no increase in the RAF levy,” said Godongwana in the budget documents he presented to parliament.

“In combination, these changes will ensure that fuel taxes as a percentage of the price of fuel are below 40%. The last time the fuel prices were not increased due to a change in either the general fuel levy or RAF levy was in 1990.”

Motorists pay a general fuel levy of R3.85 per litre of petrol and a RAF levy of R2.18 per litre for both petrol and diesel.

“Sin tax” hikes

But Godongwana is planning to hit those who consume vaping products in the pocket as he traditionally does with smokers.

He was planning amend tax laws by January 2023 to allow for taxation on vaping as part of the “sin tax revenue stream”.

After public consultation, government proposes to apply a flat rate excise duty rate of at least R2.90/ml to both nicotine and non-nicotine solutions.

“The proposal will be included in the 2022 Taxation Laws Amendment Bill for further consultation before being introduced from January 1 2023.”

Godongwana increased the prices of alcoholic drinks and tobacco by between 4.5% and 6.5%.

The prices of spirits such as whisky, vodka and gin will rise by R4,83 per 750ml per bottle while a packet of 20 cigarettes will go up by just over R1. A 340ml can of beer or cider will cost 11 cents more.

Corporate tax cut

Godongwana cut corporate tax from 28% to 27%, effective from the end of March, while VAT and personal income tax have also not been raised.

“Madam speaker, in these trying times and without compromising our ability to collect revenue, we have managed, through these tax proposals, to keep money in the pockets of South Africans and to create conditions for greater investment in the economy.”



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