by Linda Straker
- Excise Tax on tobacco products will be 200%
- Excise tax on alcohol will be $1.50 and $5 per litre
- Special Parliament Sitting on Friday, 20 January 2023
The Dickon Mitchell administration is seeking Parliament approval to decrease the percentage of inflows from the National Transformation Fund (NTF) payable into the Contingency Fund from 40% to 10%.
The resolution to reduce the amount to the deposit in the special contingency fund is one of 2 resolutions that will be debated in a Special Parliament Sitting of both the Lower and Upper Houses of Parliament on Friday, 20 January 2023.
Once the resolution amending Section 45 (2) of The Public Finance Management Act, NO. 17 OF 2015 is approved, the National Transformation Fund Regulations amendment shall come into force on 1 February 2023.
That section of the law provides for Government to establish the account for the special fund, but the Fiscal Responsibility Act mandates the amount of money to be deposited into that account. Section 8 (3) (f) of the Fiscal Responsibility Act mandates that 40% of the monthly inflows into the National Transformation Fund shall be saved for general budget financing purposes including contingency spending, natural disaster and debt reduction.
The other resolution is amendments to the First Schedule and the Second Schedule of the Excise Act. The resolution is seeking to approve an amendment to the schedule that will increase alcohol and tobacco products as of 1 February 2023.
“The excise tax on alcohol from $1.10 and $4.40 per litre to $1.50 and $5 per litre respectively and increase the excise tax on cigarettes from 105% to 200%,” said the resolution which Prime Minister and Minister for Finance Dickon Mitchell will present.
The Excise Act amendment will increase the wholesale and retail price of most alcohol products, including beer, wine, whisky, rum, brandy, vodka, gin and liqueur as well as all tobacco and tobacco substitutes products such as cigars, cheroots and cigarettes. Tobacco products will see the Excise Tax moving from 105% to 200% while the excise tax on alcohol will move from $1.10 and $4.40 per litre to $1.50 and $5 per litre respectively.
The increase was first announced by Prime Minister Dickon Mitchell when he presented the 2023 budget statement on 5 December 2023.
