A consideration of the potential taxation of Cannabis in South Africa
Taxation is part of the daily lives of most persons in the world. A new product supplied into a market is likely to be subject to some form of taxation. Taxation of a new product for example cannabis requires rigorous planning due to its diversity and complexity. South Africa has a long way to go considering the possible legalisation of cannabis and the resulting tax legislation of it. The most recent changes made were the finalisation of the Cannabis for Private Purposes Bill of 2020. According to a Government statement released on 06 August 2020, the submission to Parliament was approved by the Minister of Justice and Correctional Services and noted in the Government Gazette no 43595, vol. 662 on 07 August 2020. The mini-dissertation does not include this latest legislation, due to not being approved by Parliament yet. Certain countries including various American states have not yet approved cannabis legislation. They have, however, legalised the recreational and medicinal use of it. Many other countries are exploring the possibilities should the use of cannabis no longer be prohibited. Due to a lack of appropriate data and studies in South Africa, international studies and legislation could be used to supplement this shortage of information to formulate tax policies for cannabis in South Africa. This report confirms that by legalising the recreational and medicinal use of cannabis, a government may reap enormous financial benefits, bearing in mind its versatility. Careful consideration is needed in establishing the best tax policy, to avoid subjecting cannabis to over tax. New taxes are not required but rather that existing tax legislation should be enforced.