OPINION | Vape tax undermines smoking reduction efforts

Dear minister of finance,

In 2022, when you presented the budget, you introduced excise duties on nicotine and nicotine substitute solutions in vaping products. You set this tax at R2.90 per millilitre, increased it to R3.04 the following year, and then again to the current rate of R3.18, pushing the tax on a 30ml bottle of e-liquid to R95.

To you and the policymakers at Treasury, this may be a logical extra revenue stream for the fiscus. However, the justification as to why this tax was necessary hinged on concerns relating to youth initiation and undermining tobacco control efforts.

As you prepare to present the medium-term budget policy statement, we ask: where is the proof that this excise tax has translated into lower youth initiation or a reduction in smoking rates?

Local research has shown that youth among high-income groups were undeterred; no study has been conducted on the majority of poor kids in the country. While the majority of adult smokers, who find themselves in less affluent positions, are unable to make the switch to a safer nicotine alternative due to the inflated price.

If the government didn’t have a harm reduction policy, then, as it still doesn’t to this day, your move and the department of health’s attempts to impose drastic regulations on these products are further setting back efforts at reducing the high rate of health burdens as a result of combustible tobacco in this country.

High excise duties on vaping products are counterproductive and have been proven to undermine efforts to cut down smoking rates. By design, vaping is a less harmful alternative to smoking combustible tobacco. Making vaping more expensive through taxation discourages uptake, especially in lower-income communities where smoking prevalence is still higher.

When high excise duties push the prices of traditional tobacco and new-generation products up, they automatically divert smokers towards cheaper illicit tobacco products that are incredibly harmful.

The SAPS, in a presentation to parliament’s portfolio committee on health on October 22, warned that highly organised criminal syndicates control the trade in illicit tobacco.

Sars loses billions due to tax avoidance by manufacturers of cheap illicit products that negatively affect the operations of legitimate manufacturers.

Above that, the department of health is forging ahead with the highly flawed Tobacco Products and Electronic Delivery Systems Control Bill.

The bill aims to regulate traditional tobacco further, but also new-generation ones such as vapes and e-cigarettes. It seeks to treat both product categories as equivalent, even in the face of growing, irrefutable evidence that they carry different risk profiles.

It’s unclear what the department is trying to achieve by declaring a war on harm reduction and a proven method in smoking cessation.

In the same parliamentary briefing, SAPS further cautioned that the bill will introduce new offences that may strain investigative and prosecutorial capacity, especially in under-resourced areas.

It specifically flagged the inherent difficulties in enforcing the plain packaging and labelling provisions in the bill, noting that this would require advanced detection tools, real-time databases, and additional training which the SAPS has limited capacity for.

Although the mid-term budget does not pronounce on taxes, we have a few tips to consider as you prepare the full budget next February:

· Reduce taxes on vapes and e-cigarettes: Kickstart a harm reduction policy by setting lower excise duties on new generation products to encourage higher uptake that may lower the smoking rate.

· Ringfence excise duties for cessation efforts: If you insist on levying excise duties on vapes and e-cigarettes, ringfence the money so it is spent purely on cessation efforts. Some of it could subsidise nicotine replacement therapy in public health facilities.

· Use scientific evidence as a basis to tax harmful products higher: Esteemed institutions show that vaping is 95% less harmful than traditional tobacco. Place combustible tobacco at the top tariff and vapes based on the nicotine strength at the bottom. This would encourage more people to make the switch to less harmful alternatives.

· Talk to the public to encourage safer options: Embark on a national education campaign using all media to educate smokers not just about the dangers of combustible tobacco but also to promote higher uptake of safer alternatives through the embrace of a harm reduction policy.

Minister Godongwana, you can either treat vapes and e-cigarettes as vices to be punished through higher taxes or as a tool to be leveraged for harm reduction.

The first path will only swell the coffers of criminal syndicates that control the market and exacerbate the burden on the health system from tobacco-related diseases and deaths.

The other option is simple yet effective – fewer taxes on less harmful alternative products could translate to fewer cigarette smokers, reduced hospitalisation rates and avoidable deaths.