Inflation-linked sin tax increases promote fairness, stability, and long-term sustainability across alcohol categories.
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THE Beer Association of South Africa (BASA) has welcomed government’s decision National to increase excise duties on alcoholic beverages by 3.4 per cent, in line with inflation.
Commenting on the announcement, BASA CEO Charlene Louw said they acknowledge and appreciate National Treasury’s decision to adopt a CPI-aligned excise adjustment.
"At a time when fiscal consolidation remains a priority and economic growth is gradually recovering; this approach reflects a balanced and pragmatic policy stance.
An inflation-linked increase provides predictability and policy stability, both critical for long-term investment decisions across the beer value chain. From farmers and manufacturers to logistics operators, tavern owners and township retailers, certainty in excise policy supports planning, protects jobs and strengthens business sustainability,” said Louw.
Budget 2026 logo. Finance Minister Enoch Gondongwana delivered the Budget Speech on Wednesday, February 2026, raising excise duties on alcohol to 3.4 per cent in line with inflation.
Image: File.
Government has emphasised the importance of faster growth, investment and employment creation.
"A stable excise environment reinforces these objectives by enabling brewers, particularly small and emerging producers to expand responsibly, maintain employment and continue contributing meaningfully to economic activity.
The beer industry recognises the need for fiscal discipline and sustainable public finances. A transparent, CPI-based excise trajectory strikes an appropriate balance between revenue generation and protecting the competitiveness of the regulated market," said Louw.
She said excessive or unpredictable increases can unintentionally incentivise illicit alcohol trade, undermining both public health objectives and revenue collection. A predictable framework helps retain consumers within the legal market, supporting compliance, safeguarding jobs and ensuring continued tax contributions.
"The beer sector has strong linkages across agriculture, manufacturing, hospitality, logistics and small enterprises. Policy certainty enhances investor confidence and supports the broader economic reform agenda outlined in the Budget.
BASA remains committed to constructive engagement with National Treasury to advance a stable, transparent and multi-year excise framework that promotes inclusive growth, protects employment and supports long-term fiscal sustainability," added Louw.