Trends in South Africa's tobacco market: Insights from tax administrative data

Effective mobilization of revenue from tobacco requires a clear understanding of market dynamics and their evolution under excise taxation. This study provides a descriptive analysis of the South African tobacco industry using administrative tax data. We examine firm and market characteristics, including government revenue from cigarette excise taxes, market concentration, financial outcomes, and employment trends. In addition, we employ a dynamic panel model to describe the relationship between excise taxation and outcomes for tobacco firms. Our trend analysis findings highlight a notable structural shift in the market since 2015. Regression results indicate that while higher excise taxes are associated with lower gross sales, they show no meaningful associations with changes in the financial performance of firms. By utilizing administrative data, this study lays the groundwork for future research on excise-taxed industries, offering insights to guide evidence-based policy decisions.