Finance Minister Enoch Godongwana announces excise duty increases on cigarettes, alcohol and fuel levies in South Africa during the 2026 National Budget speech

When Enoch Godongwana stepped up to deliver the 2026 National Budget in South Africa, there was little expectation of dramatic surprises.

Instead, what South Africans got was a steady, measured outline of how government plans to balance the books in a year still shaped by slow growth, rising debt costs and pressure on public services.

The message was clear from the outset.

Government needs revenue, and certain tax adjustments simply cannot be avoided.

Among those, increases to excise duties stood out.

Smokers to Feel the Pinch Again

If you smoke, you are going to notice the difference.

Excise duties on tobacco products will rise broadly in line with inflation.

That includes traditional cigarettes as well as newer electronic nicotine and non-nicotine delivery systems, which Treasury continues to pull firmly into the tax net.

A pack of 20 cigarettes will now carry a higher excise burden, climbing from R22.81 to R23.58.

Pipe tobacco and cigarette tobacco both edge up, while cigars see a sharper rand-based jump.

Treasury has long defended these hikes as both a revenue tool and a public health measure.

South Africa already has one of the more aggressive tobacco tax regimes on the continent, part of a strategy aligned with global anti-smoking commitments.

Still, for consumers, it simply means paying more at the till.

Alcohol Prices Move Up in Step with Inflation

Drinkers are not spared either.

Excise duties on alcoholic beverages will also increase in line with inflation.

That translates into a few cents more on a can of beer or cider, a slightly higher price for a bottle of wine, and a more noticeable bump for spirits.

While the individual increases may seem small, over time they accumulate.

South Africa relies heavily on so-called “sin taxes” to supplement revenue without directly hiking income tax or VAT. Alcohol duties, in particular, make up a meaningful slice of excise collections each year.

Government often argues that these taxes help offset the social costs linked to alcohol abuse, including healthcare and policing.

Critics, however, warn that higher prices can fuel illicit trade, especially in lower-income communities.

Fuel Levies Rise as Motorists Brace for Impact

For motorists, the Budget brought another familiar adjustment.

The general fuel levy will tick up for both petrol and diesel, alongside increases in the carbon fuel levy and the Road Accident Fund levy.

On paper, the increases are measured in cents per litre.

In practice, they ripple through the economy, influencing transport costs, food prices and logistics.

Fuel levies have long been a politically sensitive lever.

They are easier to adjust than VAT, but they are also highly visible.

With many households already stretched, even small increases can spark frustration.

Why Government Says It Has Little Choice

South Africa’s fiscal position remains under strain.

Debt-servicing costs consume a large portion of the national budget, leaving less room for infrastructure, healthcare, education and social grants.

Godongwana framed the excise and levy adjustments as necessary steps to maintain fiscal stability while keeping increases broadly aligned with inflation.

In other words, Treasury is trying to avoid sharp shocks while still collecting the revenue it needs.

Over the past few years, the National Treasury has leaned on predictable, inflation-linked increases to provide certainty.

Businesses can plan for them, and government can forecast revenue with more confidence.

Watching the Budget Unfold

As always, South Africans were able to follow the speech live through Parliament TV and the South African Broadcasting Corporation.

Budget Day has become something of a national ritual, dissected not only by economists and analysts but also by ordinary citizens trying to understand what it means for their wallets.

This year’s speech did not radically reshape the tax landscape.

Instead, it reinforced a cautious approach: incremental adjustments rather than sweeping reforms.

What’s Next

The Budget process does not end with the speech.

Parliamentary committees will now scrutinise the proposals, and public debate is likely to intensify.

Consumers can expect retailers to adjust prices as the new excise duties take effect.

Motorists will watch fuel price announcements closely.

Meanwhile, businesses will factor the higher input costs into their forecasts.

Attention will also turn to whether revenue projections hold up and whether economic growth improves enough to ease pressure in future budgets.

Summary

The 2026 National Budget delivered by Finance Minister Enoch Godongwana keeps excise duties on tobacco, alcohol and fuel levies moving in line with inflation.

Smokers, drinkers and motorists will all pay slightly more, as government seeks additional revenue without introducing dramatic new taxes.

While the increases are modest in isolation, they form part of a broader effort to stabilise South Africa’s finances in a challenging economic climate.

The real test will be whether these steady adjustments are enough to support growth and restore fiscal breathing room in the years ahead.