SARS Excise Duties

Published By GlobalTrade Customs (Pty) Ltd

Understanding SARS Excise Duties in South Africa: A Guide for Importers and Manufacturers

What Are SARS Excise Duties?

Excise duties are indirect taxes imposed by the South African Revenue Service (SARS) on the production, importation, or sale of specific goods such as alcohol, tobacco, petroleum, and certain luxury items.

Unlike customs duties, which apply broadly to imported goods, excise duties target particular products — often those with health, environmental, or social impacts. These duties are governed by the Customs and Excise Act No. 91 of 1964 and its various schedules and amendments.

Excise duties serve two key purposes:

1. Revenue Generation – providing a steady income source for the state.
2. Policy Regulation – discouraging consumption of harmful or luxury goods.

Categories of Excise Duties in South Africa

SARS levies several types of excise duties and related taxes:

1. Specific Excise Duties

Charged per physical quantity (e.g., litres, kilograms, or units).

• Common examples: Alcohol, tobacco, and fuel products.

2. Ad Valorem Excise Duties

Charged as a percentage of the product’s value — often applied to luxury or non-essential goods such as perfumes or electronics.

3. Environmental and Health Levies

Includes levies such as the Fuel Levy, Carbon Tax, and Health Promotion Levy (on sugary beverages).

4. Other Special Levies

Such as the Air Passenger Tax (APT) and the Diamond Export Levy, also administered by SARS.

Each duty type has specific calculation methods, licensing requirements, and compliance obligations.

How Are Excise Duties Calculated?

Excise duties are determined according to the SARS Tariff Book (Schedule No. 1, Part 2A and 2B). The calculation depends on whether the product falls under a specific or ad valorem structure.

Example 1: Specific Duty (Per Quantity)

If spirits attract an excise rate of R30 per litre of absolute alcohol, and you import 100 litres of 40% ABV spirits:

• Absolute alcohol = 100 × 0.40 = 40 litres
• Excise payable = 40 × R30 = R1,200

Example 2: Ad Valorem Duty (Percentage of Value)

If luxury perfume valued at R1,000 attracts a 20% excise duty:

• Excise payable = R1,000 × 20% = R200

Note: Excise duties are payable in addition to customs duties and VAT — significantly influencing the total landed cost.

Who Must Register and Pay Excise Duties?

SARS requires the following entities to register and obtain licences before trading in excisable goods:

• Manufacturers and producers of excisable products.
• Importers of goods subject to excise duty.
• Bonded warehouse operators storing goods under excise suspension.

Registered entities must maintain detailed production and stock records, submit periodic excise returns, and pay duties within specified deadlines.

SARS Excise Warehousing and Suspension

SARS allows goods to be stored under duty suspension in registered excise warehouses. This means excise duty becomes payable only when goods are released for local consumption.

To qualify for excise suspension:

• Businesses must hold a valid SARS excise warehouse licence.
• Facilities must meet security and record-keeping standards.
• SARS may conduct site inspections and compliance audits.

This system benefits importers and manufacturers who handle large volumes and exports, but non-compliance can result in severe penalties or licence suspension.

2025 Updates: Excise Duty Rate Adjustments

According to the 2025 National Budget Review, excise duties increased as follows:

• Alcoholic beverages: +6.75%
• Tobacco products: +4.75%

The increases are part of the government’s continued effort to align excise duties with inflation and public health objectives.
Future policy discussions suggest the introduction of tiered excise frameworks for alcohol, meaning rates could vary based on alcohol content levels.

Businesses importing or manufacturing these products should update pricing and forecasting models accordingly.

Consequences of Non-Compliance

Failing to comply with excise requirements can have serious financial and legal implications, including:

• Seizure of goods by SARS.
• Heavy administrative penalties and interest.
• Suspension or cancellation of excise licences.
• Criminal prosecution for fraudulent declarations.

Maintaining accurate records and ensuring up-to-date compliance procedures is therefore critical to business continuity.

How GlobalTrade Customs (Pty) Ltd Can Help

At GlobalTrade Customs (Pty) Ltd, we assist importers, manufacturers, and traders in navigating the complexities of SARS excise duty compliance.

Our professional customs team helps clients with:

• Excise Licensing & Registration: Guidance through the SARS application process.
• Tariff Classification & Valuation: Ensuring your products are classified correctly under the Tariff Book.
• Excise Calculation & Returns: Accurate duty computation and on-time submissions.
• Warehouse Management & Suspension Compliance: Helping you meet SARS storage and reporting requirements.
• Audit Support: Preparing documentation and responding to SARS queries or post-clearance audits.

We work closely with our clients to minimise compliance risks, avoid delays, and ensure full alignment with SARS regulations.