South Africa’s vaping tax: industry fears a shift to illegal sellers
Industry groups say a rising excise duty on vaping liquids could push buyers toward illegal sellers, pointing to what has happened in the cigarette trade.
By
Nomvula Dlamini
In brief
- The duty on vaping liquids was R2.90 per millilitre in June 2023 and R3.29 after the February 2026 Budget.
- Industry stakeholders fear high taxes could fuel illicit trade, a concern rather than a proven outcome.
- British American Tobacco South Africa plans to close its Heidelberg plant, citing illegal cigarette sales.
- The Cancer Association of South Africa warns against portraying vaping as harmless.
Legal sellers of vaping products in South Africa could lose ground to illegal ones, industry voices warn, as the excise duty on vaping liquids keeps climbing. The fear is that a higher price at the till sends buyers to unregulated suppliers. For now this is an industry concern, not a demonstrated outcome, and no figure exists for the size of any illicit vaping market today.
Who raised the alarm, and where
According to African Insider, industry stakeholders caution that the country risks repeating what happened in its illegal cigarette market. Daily Investor reports that the worries surfaced in written submissions. The National Treasury and the South African Revenue Service (SARS) were reviewing such submissions as they prepared their reply to public feedback on the 2026 Draft Tax Bills. How the two bodies answered is not indicated.
Industry representatives say the levy may erode the price competitiveness of lawful products and steer some customers to black-market sellers. They have asked the government to rethink how vaping is taxed, and to follow an approach built on relative risk, one that treats vaping products differently from cigarettes that are burned.
How the levy has climbed
The state first imposed a per-millilitre excise charge on vaping liquids in June 2023. It applies to both nicotine and non-nicotine liquids. The February 2026 Budget then lifted the rate, and industry representatives responded by arguing that the higher charge would hurt legal sales.
| Date | Excise duty per millilitre |
|---|---|
| June 2023 | R2.90 on nicotine and non-nicotine vaping liquids |
| February 2026 Budget | R3.29 |
The cigarette market as a cautionary tale
Those sounding the alarm look to tobacco. Reuters reported that British American Tobacco South Africa intends to shut its manufacturing site at Heidelberg before 2026 ends, and the company blames the spread of illegal cigarette sales. The closure concerns cigarettes, not vaping, and no causal link to the vaping tax has been shown.
A wider illicit economy and a health caution
- Business Day reported that unlawful trading reaches well past tobacco, into alcohol, fuel, clothing and pharmaceuticals.
- A study commissioned by the Consumer Goods Council of South Africa values the illicit economy at R280 billion spread over 12 sectors, though other estimates differ.
- The Cancer Association of South Africa cautions against presenting vaping as harmless.
Minenhle Dlamini, the association’s Tobacco Control Programme Coordinator, listed the dangers, according to Daily Investor: “These risks include nicotine addiction, lung damage and the increased likelihood of moving onto traditional tobacco products,”
Policymakers, the report notes, must weigh public health goals and tax revenue against effective enforcement against illicit products. Industry representatives warn that without suitable regulation and enforcement, the growing vaping market could come under the same pressures that have weakened the legal cigarette industry.
The sources describe the policy puzzle in terms of competing aims. According to African Insider, the debate over vaping duties involves public health worries as well as revenue. Officials are expected to weigh the health objective against collection of tax, while also curbing the sale of unlawful goods.
Those who favour a lighter touch say a distinction between vaping products and combustible cigarettes should guide the rules. Health campaigners answer that vaping should not be presented as harmless. The two camps therefore disagree about both the level of the duty and the message that the product carries to consumers.
The tobacco maker cited by Reuters links its Heidelberg decision to illegal cigarette sales, which it says already take up most of the market. That plant is the only facility named in the reporting on the cigarette side of the argument, and the 230 jobs mentioned are tied to it.
Photo: Mihi tr / Wikimedia Commons, CC BY 4.0
