How Mthuli Ncube’s 2021 budget will affect you

If you’re a drinker or smoker

Your habit just got more expensive, a lot more. Excise duty on tobacco and alcohol is going up. Currently, excise duty on cigarettes is $100 per 1 000 cigarettes plus 20% of the ex-factory price. It is now going up to the equivalent of US$5 per 1 000 cigarettes plus 20% of the ex-factory price.

In other terms, excise duty on tobacco is up by 300%, 700% for spirits and 600% for beer.

BAT, the country’s biggest cigarette maker, has recently reported a drop in volumes. The new ‘sin tax’ will hit sales even harder.

Spirits, such as your Glenfiddich, currently cost 30% plus $10 for every litre of pure alcohol (LAA) in excise duty. This now goes up to 30% plus an equivalent of US$1 per LAA. Duty on other fermented beverages, including beers, goes up from $3 per litre to the equivalent of US$0.25 per litre.

If you are a trucker

Your trucks will no longer be allowed in city centres. A Traffic Zone Restriction is being enforced on heavy vehicles, including transit traffic, whether loaded or unloaded. Starting January 1, 2021, trucks will not be allowed in city centres or residential areas.

Option to pay toll gates in USD

You now have the option of paying for toll gates in US dollars. Small cars will pay US$2, while the charge is US$4 for buses, US$3 for minibuses and US$10 for haulage trucks.

If you had US$1000 or less in the bank when currency changed

Treasury is setting aside the equivalent of US$75 million to compensate losses suffered when government dropped the 1:1 exchange rate. The fund will be run by the Deposit Protection Corporation (DPC). A similar US$75m compensation scheme is planned for pensioners who suffered losses from the removal of the 1:1 currency peg in February 2019. This will be co-managed by Government and the Insurance Pension Commission, the insurance regulator.

Fuel importers to pay more, consumers may feel it

Excise duty on diesel will go up by US$0.05 to match the petrol duty, at US$0.30. This means diesel, whose price has tended to lag behind petrol, will cost more. A petroleum import duty of US$0.05 will also now be added to fuel imports that come into the country by road. The move is meant to force importers to use the government’s pipeline from Beira, which smaller fuel firms have found to be more expensive than using road transport.- NewZwire

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